Bristol-Myers Squibb: A Better Earnings Outlook, Stronger Momentum Heading Into 2025

Core Viewpoint - Bristol-Myers Squibb Company (BMY) reported strong Q2 results, leading to a significant share price increase and a positive outlook for the company despite concerns about long-term EPS trajectory [1][4][15] Financial Performance - BMY achieved Q2 non-GAAP EPS of $2.07, exceeding Wall Street expectations by $0.44 [4] - Revenue for Q2 was $12.2 billion, reflecting a 9% year-over-year increase, with a 13% increase in the US market [4] - Management raised FY 2024 EPS guidance to a range of $0.60 to $0.90, indicating confidence in future performance [4] Valuation Metrics - BMY's trailing 12-month free cash flow yield is now at 12.9%, suggesting potential for dividend increases [4] - Current dividend yield stands at 4.8%, which is considered high [4] - Despite a recent rally of over 20%, the stock remains undervalued with a projected price near $76 based on normalized EPS of $6.90 [8][10] Technical Analysis - BMY's stock broke out from a downtrend resistance line following the July earnings update, indicating a bullish trend [13][14] - The 50-day moving average is poised to cross above the 200-day moving average, signaling a potential bullish golden cross [13] - Support levels are identified between $46 and $48, while resistance is noted in the mid-$50s [13][14] Industry Context - The Health Care sector is showing strong momentum in the second half of the year, with BMY's performance contributing to this trend [2] - Upcoming industry conferences may provide further updates and potential volatility for BMY shares [3][10]