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Bristol-Myers Squibb Company (NYSE:BMY): Immense Growth Potential?

Simply Wall St

Looking at Bristol-Myers Squibb Company's (NYSE:BMY) earnings update in December 2018, analyst consensus outlook appear cautiously optimistic, with earnings expected to grow by 35% in the upcoming year compared with the past 5-year average growth rate of 2.2%. Currently with trailing-twelve-month earnings of US$4.9b, we can expect this to reach US$6.6b by 2020. Below is a brief commentary around Bristol-Myers Squibb's earnings outlook going forward, which may give you a sense of market sentiment for the company. For those interested in more of an analysis of the company, you can research its fundamentals here.

View our latest analysis for Bristol-Myers Squibb

What can we expect from Bristol-Myers Squibb in the longer term?

The longer term expectations from the 11 analysts of BMY is tilted towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To reduce the year-on-year volatility of analyst earnings forecast, I've inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.

NYSE:BMY Past and Future Earnings, April 17th 2019

This results in an annual growth rate of 14% based on the most recent earnings level of US$4.9b to the final forecast of US$7.7b by 2022. EPS reaches $4.65 in the final year of forecast compared to the current $3.01 EPS today. In 2022, BMY's profit margin will have expanded from 22% to 29%.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Bristol-Myers Squibb, I've compiled three relevant factors you should further research:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is Bristol-Myers Squibb worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Bristol-Myers Squibb is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Bristol-Myers Squibb? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

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.

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. Thank you for reading.