In the current uncertain market environment, big pharma stocks are worth considering given their defensive nature, attractive dividend yields and solid growth opportunities. Bristol-Myers reported excellent results, sending estimates higher and the stock to a Zacks Rank #1 (Strong Buy).
About the Company
Headquartered in New York, Bristol-Myers Squibb Company (BMY) is a global specialty biopharmaceutical company focused on discovering, developing and delivering innovative medicines for serious diseases. Their treatments help people fight against diseases such as cancer, cardiovascular disease, hepatitis B and hepatitis C, HIV/AIDS and, rheumatoid arthritis.
Strong Q1 Results & Upgraded Guidance
The company reported strong results for Q1, beating on top and bottom lines, and also raised their guidance for the year. Operating earnings (excluding special items) of $0.74 per share easily beat the Zacks Consensus Estimate of $0.66. Earnings were also up 4% from the same quarter last year.
Total revenues of $4.4 billion also beat the Zacks Consensus Estimate of $4.2 billion. Revenues increased 9% year over year thanks mainly to strong product sales.
The management raised its earnings guidance for 2016. They now expect earnings in the range of $2.50 to $2.60 per share, up from the previous guidance of $2.30 to $2.40 per share.
Analysts have been raising their estimates for the stock. Zacks Consensus Estimates for the current and next year have surged to $2.60 and $3.33 per share, from $2.40 and $3.10 before the results.
The company beat the Zacks Estimates in all of last four quarters with an average quarterly surprise of 28%. In fact looking at the longer-term performance, it has delivered a beat consistently in every quarter since 2013.
Leader in Immuno--Oncology
The company is a leader in cancer care focused on Immuno-Oncology, which is now a major treatment choice alongside surgery, radiation, chemotherapy and targeted therapies for certain types of cancer. This approach aims to harness the body’s natural immune response to fight cancer.
Bristol Myers has a comprehensive clinical portfolio of investigational and approved Immuno-Oncology agents, many of which were discovered and developed by their scientists. They collaborate with academia, biotech companies to research the potential of Immuno-Oncology and non-Immuno-Oncology combinations.
The Bottom-Line
After a period of weakness in 2013-201, the company has rebounded nicely and continues to grow its revenues and earnings consistently now. With solid growth potential and a decent dividend yield, the stock is worth a look. In addition to a top Zacks Rank, the stock also benefits from the Zacks Industry Rank of 24 out of 265 (top 9%).
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