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Bristol-Myers Squibb (BMY) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

Bristol-Myers Squibb (BMY) closed at $45.98 in the latest trading session, marking a -1.73% move from the prior day. This change lagged the S&P 500's 0.61% loss on the day. Elsewhere, the Dow lost 0.72%, while the tech-heavy Nasdaq lost 0.56%.

Prior to today's trading, shares of the biopharmaceutical company had lost 8.07% over the past month. This has lagged the Medical sector's gain of 2.13% and the S&P 500's gain of 5.68% in that time.

Wall Street will be looking for positivity from BMY as it approaches its next earnings report date. This is expected to be April 25, 2019. In that report, analysts expect BMY to post earnings of $1.06 per share. This would mark year-over-year growth of 12.77%. Meanwhile, our latest consensus estimate is calling for revenue of $5.80 billion, up 11.67% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.16 per share and revenue of $23.86 billion, which would represent changes of +4.52% and +5.75%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for BMY. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. BMY currently has a Zacks Rank of #4 (Sell).

Digging into valuation, BMY currently has a Forward P/E ratio of 11.25. Its industry sports an average Forward P/E of 15.4, so we one might conclude that BMY is trading at a discount comparatively.

Also, we should mention that BMY has a PEG ratio of 2.38. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Large Cap Pharmaceuticals industry currently had an average PEG ratio of 2.13 as of yesterday's close.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 67, putting it in the top 27% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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