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Why Is Bristol Myers (BMY) Up 6.3% Since Last Earnings Report?

A month has gone by since the last earnings report for Bristol Myers Squibb (BMY). Shares have added about 6.3% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Bristol Myers due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Bristol-Myers Q3 Earnings Beat, Sales Decline Y/Y

The company reported earnings of $1.99 per share, which beat the Zacks Consensus Estimate of $1.83 and increased from $1.93 reported in the year-ago quarter.

Total revenues of $11.2 billion surpassed the Zacks Consensus Estimate of $11 billion but decreased 3% from the year-ago period due to generic competition for multiple myeloma (MM) drug, Revlimid and foreign exchange impacts, partially offset by in-line products (primarily Eliquis and Opdivo) and new product portfolios (primarily Opdualag, Abecma and Reblozyl). Our estimate for total revenues was $11.2 billion.

Quarterly Details

Revenues from in-line and new product portfolios increased 8% (13% when adjusted for foreign exchange impacts) to $8.6 billion. Revenues increased 9% to $7.9 billion in the United States. However, revenues were down 24% outside the country.

Total In-Line product revenues came in at $8 billion, up 5% from the year-ago quarter, driven by demand growth. The Zacks Consensus Estimate and our estimate for the same were $8.4 billion. Within this segment, Eliquis drove growth for the company as sales increased 10% to $2.6 billion. Revenues in international markets were impacted by foreign exchange impacts. We note that Bristol-Myers has a collaboration agreement with Pfizer for Eliquis.

The companies collaborated in 2007. Pfizer funds between 50% and 60% of all development costs, depending on the study. Profits and losses are shared equally on a global basis, except in certain countries where Pfizer commercializes Eliquis and pays BMY a sales-based fee.

Sales of the immuno-oncology drug Opdivo, approved for multiple cancer indications, were up 7% year over year to $2 billion. The Zacks Consensus Estimate was pegged at $2.1 billion. The label expansion of the drug boosted sales, driven by higher demand across multiple indications, including the Opdivo+Yervoy-based combinations for non-small cell lung cancer (NSCLC), the Opdivo+Cabometyx combination for kidney cancer and the Opdivo-based therapies for various gastric and esophageal cancers.

Another MM drug, Pomalyst, generated sales of $886 million, up 4% year over year.

Sales of the rheumatoid arthritis drug, Orencia, grew 1% to $883 million.

The leukemia drug, Sprycel, raked in sales of $560 million, up 2% year over year.

Melanoma drug, Yervoy contributed $523 million to the top line, up 2%.

New product portfolio revenues grew 61% to $553 million, driven by higher demand for Reblozyl (up 19% to $190 million), Abecma ($107 million), and Opdualag ($84 million).

However, Revlimid revenues declined 28% to $2.4 billion from the year-ago quarter due to a loss of exclusivity, primarily in international markets. Our estimate for the same was $2.1 billion. Abraxane revenues declined 33% due to the entry of authorized generics.

Adjusted research and development expenses decreased 5% to $2.3 billion in the quarter. Adjusted marketing, selling and administrative expenses increased 4%. Gross margin fell to 79.8% from 81.1% in the quarter.

2022 Guidance

Bristol-Myers continues to expect 2022 earnings of $7.44-$7.74. Revenues are anticipated to be around $46 billion. The Zacks Consensus Estimate for earnings is pegged at $7.52 per share on revenues of $45.79 billion. Revlimid sales are expected to be $9-$9.5 billion.

 

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

VGM Scores

At this time, Bristol Myers has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Bristol Myers has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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Bristol Myers Squibb Company (BMY): Free Stock Analysis Report

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