Bristol-Myers Squibb Company Annual Results Just Came Out: Here's What Analysts Are Forecasting For Next Year
It's been a good week for Bristol-Myers Squibb Company (NYSE:BMY) shareholders, because the company has just released its latest annual results, and the shares gained 4.2% to US$66.25. It was an okay result overall, with revenues coming in at US$26b, roughly what analysts had been expecting. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what analysts' statutory forecasts suggest is in store for next year.
See our latest analysis for Bristol-Myers Squibb
Taking into account the latest results, the latest consensus from Bristol-Myers Squibb's ten analysts is for revenues of US$42.1b in 2020, which would reflect a huge 61% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to surge 175% to US$5.54. Yet prior to the latest earnings, analysts had been forecasting revenues of US$42.2b and earnings per share (EPS) of US$5.75 in 2020. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but analysts did make a minor downgrade to their earnings per share forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$71.36, with analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Bristol-Myers Squibb, with the most bullish analyst valuing it at US$80.00 and the most bearish at US$63.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.
Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. Analysts are definitely expecting Bristol-Myers Squibb's growth to accelerate, with the forecast 61% growth ranking favourably alongside historical growth of 9.6% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.2% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Bristol-Myers Squibb is expected to grow much faster than its market.
The Bottom Line
The biggest concern with the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Bristol-Myers Squibb. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. The consensus price target held steady at US$71.36, with the latest estimates not enough to have an impact on analysts' estimated valuations.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Bristol-Myers Squibb analysts - going out to 2024, and you can see them free on our platform here.
You can also see our analysis of Bristol-Myers Squibb's Board and CEO remuneration and experience, and whether company insiders have been buying stock.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.