BMY Gains 13.1% in Three Months: Buy, Sell or Hold the Stock?

Core Insights - Bristol Myers Squibb Company (BMY) has shown strong performance recently, with shares increasing by 13.1% over the past three months, although this is slightly below the industry's growth of 15.2% [1][4] - The company has outperformed the sector and the S&P 500 during the same period [1][3] Financial Performance - BMY reported better-than-expected Q3 results on October 30, driven by increased demand for key drugs such as Opdivo, Breyanzi, Reblozyl, and Camzyos [4][8] - The company raised its revenue guidance, reflecting strong performance and giving investors renewed confidence [4][8] Growth Portfolio - BMY's Growth Portfolio includes drugs like Opdivo, Reblozyl, and Breyanzi, which have maintained strong top-line growth [5][9] - Opdivo sales in the U.S. are bolstered by its launch in MSI-high colorectal cancer and growth in non-small cell lung cancer, with international sales benefiting from label expansions [6][7] - Reblozyl is annualizing over $2 billion in sales, while Breyanzi is also performing well with annualized sales exceeding $1 billion [9][10] New Drug Approvals and Collaborations - The approval of Opdivo Qvantig for subcutaneous use has enhanced BMY's immuno-oncology portfolio, with expectations for global sales to increase in the high single-digit to low double-digit range by 2025 [7] - BMY's acquisition of Orbital Therapeutics for $1.5 billion will add OTX-201, a promising RNA immunotherapy candidate, to its pipeline [14][15] - Collaborations with BioNTech for bispecific antibodies targeting PD-1 and VEGF are also in progress, indicating a focus on innovative cancer treatments [16] Legacy Portfolio Challenges - BMY's legacy portfolio is facing challenges due to generic competition, with expected declines of 15-17% in sales for legacy drugs by 2025 [12][8] - The legacy portfolio includes Eliquis, which is a significant contributor to revenue but is also under pressure from generics [13] Valuation and Estimates - BMY's shares are currently trading at a price/earnings ratio of 8.78x forward earnings, which is lower than the large-cap pharma industry's average of 16.99x [17] - The Zacks Consensus Estimate for 2025 EPS has increased to $6.51 from $6.43 over the past 60 days, indicating positive sentiment [19] Investment Outlook - BMY is considered a safe haven for investors in the biotech sector, with strong performance from its growth drugs stabilizing revenue amid generic competition [21] - The company offers an attractive dividend yield of 4.73%, making it a compelling option for existing investors [22]