Bristol-Myers Squibb stock forecast after announcing $15 billion buyback
On Monday, Bristol-Myers Squibb Co. (NYSE:BMY) shares gained 2.5%, extending this week’s gains to over 10%. The company recently announced a share buyback program worth $15 billion. The company also raised its quarterly dividend by more than 10% to $0.54 per share.
Bristol-Myers approved an additional share repurchase program of $15 billion to the previously approved $200 million, for a total of $15.2 billion. Its quarterly dividend raise now reflects a 3.48% forward annual yield based on the prevailing stock price.
Board chair and CEO Giovanni Caforio said Bristol-Myers expects a significant cash flow of $45 billion to $50 billion between 2021 and 2023, adding that investment in business development remains a priority.
Speaking during the repurchase program and dividend announcement, Caforio said:
We remain committed to maintaining a strong investment-grade credit rating and reducing our debt.
Is it too late to buy the stock?Copy link to section
From an investment perspective, Bristol-Myers shares trade at an attractive forward P/E ratio of 7.76, making the stock a compelling option for bargain hunters.
On the other hand, analysts expect its earnings per share to decline by nearly 300% this year, before rising at an average annual rate of 5.97% over the next five years, as compared to an annual decline of 44.40% in the previous five.
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Therefore, long-term growth investors may also express an interest in the multinational pharmaceutical company.
Technically, Bristol-Myers shares seem to be trading within an ascending channel formation in the intraday chart. As a result, the stock has now rallied into overbought conditions, creating an opportunity for a technical pullback.
Therefore, investors could target potential pullbacks at about $59.90, or lower at $57.56, while $64.64 and $66.75 are crucial resistance zones.