Bristol Stock- Bristol Myers Squibb Stock Upgraded on Drug Pipeline and FDA Approvals
Shares of the drug company
Bristol Myers Squibb
edged higher Tuesday morning after an analyst upgraded the stock and said the company’s pipeline was more valuable than investors appreciate.
The stock had been up as much as 1.2% in premarket trading Tuesday before news that federal health authorities had recommended a pause in the use of Johnson & Johnson’s Covid-19 vaccine sent
DOW JONES GLO(BA)L/DJIA”>
Dow Jones Industrial Average
futures falling. After the open, shares of
Bristol Myers Squibb
(ticker: BMY) were up 0.3%, while the Dow was down 0.5%.
In his note early Tuesday, Truist analyst Gregg Gilbert upgraded the stock to Buy from Hold and raised his target price on Bristol shares to $74 from $66. The stock closed Monday at $62.69. Shares are up 1.1% so far this year, and 4.4% over the past 12 months.
Gilbert cited a string of recent U.S. Food and Drug Administration approvals for Bristol, for both the cancer treatment ide-cel, now known as Abecma, and the cancer treatment liso-cel, now known as Breyanzi.
Gilbert focused, however, on the company’s development pipeline, which he says is the largest in its peer group. Gilbert analyzed 150 different drug programs in clinical development at Bristol. He wrote that, all told, they’re worth about $30 per share. He adds that most of those programs still aren’t even reflected in his estimates or the new price target, which he raised “to give the company more credit for the pipeline.”
Key assets in the pipeline include deucravacitinib, which could be used to treat psoriasis, psoriatic arthritis, and other conditions. The company has recently reported positive top-line data on deucravacitinib in psoriasis, and will present full data on the trials later this month.
Gilbert wrote that he now expects sales of deucravacitinib could hit $2 billion by 2026, up from the $1 billion he previously expected.
“It is important to note that BMY is developing deucravacitinib for additional indications that could significantly expand market potential, including ulcerative colitis and Crohn’s disease (both in Phase 2),” he wrote.
Other important data expected this year from Bristol’s pipeline will include data from Phase 3 trials of the company’s cancer immunotherapy Opdivo in a number of combinations in various cancers. The company is also waiting on FDA approval for Opdivo in other cancers.
“We continue to see the potential for significant upside over time driven in part by pipeline optionality,” Gilbert wrote.
Bristol shares trade at 8.2 times earnings expected over the next 12 months, well below its five-year average of 14.3 times. Of the 20 analysts who cover the stock tracked by FactSet, 14 rate it Overweight or Buy, while six rate it a Hold.
Write to Josh Nathan-Kazis at [email protected]