Bristol-Myers Squibb: Don't Waver Over Undue Fears And Doubts

seekingalpha01-27

Bristol-Myers Squibb stock has underperformed the S&P 500 significantly over the past ten years. Its 1Y total return of nearly -28% is highly disappointing.The company has made aggressive acquisitions...

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Its 1Y total return of nearly -28% is highly disappointing.The company has made aggressive acquisitions...</p>\n\n<a href=\"https://seekingalpha.com/article/4665236-bristol-myers-squibb-dont-waver-over-undue-fears-and-doubts\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Bristol-Myers Squibb: Don't Waver Over Undue Fears And Doubts</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nBristol-Myers Squibb: Don't Waver Over Undue Fears And Doubts\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-01-27 02:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4665236-bristol-myers-squibb-dont-waver-over-undue-fears-and-doubts><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Bristol-Myers Squibb stock has underperformed the S&P 500 significantly over the past ten years. Its 1Y total return of nearly -28% is highly disappointing.The company has made aggressive acquisitions...</p>\n\n<a href=\"https://seekingalpha.com/article/4665236-bristol-myers-squibb-dont-waver-over-undue-fears-and-doubts\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU1496350502.SGD","symbol_name":"FRANKLIN DIVERSIFIED DYNAMIC \"A\" (SGDHDG) ACC","start_time":0,"source_url":"https://seekingalpha.com/article/4665236-bristol-myers-squibb-dont-waver-over-undue-fears-and-doubts","article_id":"2406608714","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1617236488/image_1617236488.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2406608714","pubTimestamp":1706293800,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Bristol-Myers Squibb stock has underperformed the S&P 500 significantly over the past ten years. 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Its 1Y total return of nearly -28% is highly disappointing.The company has made aggressive acquisitions to mitigate LOE risks, but negative investor sentiment remains. However, I explain why the selling pressure hasn't intensified.Despite challenges, BMY's solid fundamentals and attractive valuation provide a solid foundation for value and income investors to capitalize on pessimistic market sentiments.With BMY likely in a quiet accumulation zone, investors should capitalize before the potential bullish mean-reversion unfolds.arlutz73 Bristol-Myers Squibb Company (NYSE:BMY) is a high-quality, top-notch biopharma company that has been battered over the past year. Based on its total return of -28% over the past year, it's way below its 5Y and 10Y total return CAGR of 3.4% and 2.2%, respectively. In other words, while BMY has underperformed the S&P 500 (SPX) (SPY) significantly over the past ten years, could the wide-moat biopharma leader make a comeback with a mean-reversion thesis? Bristol-Myers Squibb is slated to report its fourth-quarter earnings release on February 2. I last updated BMY investors in November, arguing why it was still a buy despite the downgrade in its outlook. Given the constructive consolidation over the past two months heading into its upcoming Q4 release, I assessed it's timely to provide investors with whether they should consider adding exposure. It's important to consider why BMY hasn't gained momentum from dip-buyers, even though management went on a pretty aggressive M&A spree in recent months. Accordingly, Bristol-Myers Squibb acquired Mirati Therapeutics (MRTX), Karuna Therapeutics (KRTX), and RayzeBio (RYZB). These transactions totaled \"over $20 billion\" as management attempts to quell worries over its LOE risks through the decade. Despite that, Bank of America (BAC) analysts were not convinced by the recent moves, seeing the persistence of negative investor sentiments over the patent cliff. As a result, the analysts believe that the LOE risks could \"remain an overhang on the stock.\" Seeking Alpha Quant's \"D-\" growth grade relative to its sector peers justifies such concerns. However, it's also critical to consider that BMY's attractive \"B\" valuation grade has likely priced in these headwinds. These challenges aren't new, as management addressed them at its Q3 release. As a result, I don't expect negative surprises from management in its upcoming earnings scorecard, which could lead to a further de-rating in its valuation. CEO Chris Boerner articulated his confidence in the company's business development strategies to mitigate these risks at the recent JPMorgan (JPM) Healthcare Conference in early January. He telegraphed that Bristol-Myers Squibb is still sitting on a highly profitable \"legacy cash-generating portfolio\" while it continues to build up its \"growth portfolio.\" As a result, management is increasingly confident that it is well-primed in its efforts on \"writing of the next chapter\" as the company transforms into \"one of the fastest-growing companies in the sector by the end of the decade.\" While I concur that the execution risks on its business development shouldn't be understated, it's essential to consider that Bristol-Myers Squibb has solid fundamentals to support its strategic acquisitions. With a best-in-class \"A+\" profitability grade, it corroborates the company's sector-leading profitability, bolstering its ability to acquire. Its relatively low adjusted EBITDA leverage ratio (FY24 estimates: 1.05x) confers confidence in its financial flexibility to manage these risks accordingly. Furthermore, management accentuated that the LOE risks span \"three time periods.\" As a result, I believe it affords Bristol-Myers Squibb sufficient time to build its growth portfolio to mitigate the expiry challenges, predicated on its solid profitability foundation. BMY is valued at a forward EBITDA multiple of 7.5x, well below its 10Y average of 13.5x. Underpinned by a forward dividend yield of 4.9%, it should provide valuation support from value and income investors looking to capitalize on the current buying opportunity. BMY price chart (monthly, long-term) (TradingView) Furthermore, BMY's selling pressure has subsided since it bottomed out in November 2023, suggesting the $50 support level hasn't been decisively breached. As a result, I'm increasingly confident that BMY remains in a well-supported consolidation zone, indicating accumulation. Undergirded by a relatively attractive valuation and possible peak pessimism, I gleaned an appealing opportunity for BMY investors to buy more shares. Rating: Maintain Buy. Important note: Investors are reminded to do their due diligence and not rely on the information provided as financial advice. Please always apply independent thinking and note that the rating is not intended to time a specific entry/exit at the point of writing unless otherwise specified. I Want To Hear From You  Have constructive commentary to improve our thesis? Spotted a critical gap in our view? Saw something important that we didn't? Agree or disagree? Comment below with the aim of helping everyone in the community to learn better!","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2406608714"}