Bristol Myers Squibb’s 1Q Results Miss Estimates; Street Says Buy

Bristol Myers Squibb (BMY) posted disappointing results in the first quarter as the pharmaceutical company’s revenues rose 3% year-on-year to $11.1 billion, but fell short of consensus estimates of $11.3 billion. The company reported non-GAAP earnings of $1.74 per share, up 1% year-on-year but below analysts’ estimate of $1.81 per share.

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Bristol Myers Squibb’s Board Chair and CEO Giovanni Caforio, M.D. said, “We continue to deliver solid growth, execute against our strategic priorities and make meaningful progress across our pipeline…These accomplishments, combined with our financial strength and flexibility, further advance our opportunity to renew our portfolio and drive long-term sustainable growth.”

The company also updated its FY21 guidance and expects non-GAAP EPS of between $7.35 and $7.55 per share. BMY has forecast revenue to increase in the high single digits and a non-GAAP gross margin of around 80.5%.

Separately, the company announced on Friday that the US Food and Drug Administration (FDA) has accepted its application for priority review regarding Opdivo (nivolumab), a drug that is used for the treatment of patients with bladder cancer. (See Bristol Myers Squibb stock analysis on TipRanks)

Following the earnings, Merrill Lynch analyst Geoff Meacham reiterated a Buy and a price target of $80 on the stock. Meacham said in a note to investors, “Bristol had only a modest 1Q miss (-$79M revs, -$0.07 EPS vs. consensus) and maintained its 2021 outlook, but its core Opdivo/Revlimid franchises faced headwinds that could weigh on shares today.”

“Both Opdivo and Revlimid missed by ~$150M each based on pandemic headwinds and 4Q stocking, which will be the biggest drag on sentiment today despite strong upside for Eliquis (+$331M). The Opdivo miss could raise some concerns around its “return to growth” narrative, but 1Q heme/onc trends have been broadly light across the sector and we expect a much more meaningful step up in the back half of the year driven by recent approvals/launches in renal, gastric, and lung (we’re +$325M above the Street for Opdivo 2021 sales),” Meacham added.

Overall, consensus among analysts is that BMY is a Strong Buy based on 7 Buys and 1 Hold. The average analyst price target of $74.33 implies upside potential of about 18.2% from current levels.