Expert opinion: ‘Bristol-Myers is a buy’
- Bristol-Myers made several important announcements on Monday.
- Cerity Partners' Jim Lebenthal says now is the time to buy BMY.
- Shares of Bristol-Myers Squibb Co remained almost flat in 2021.
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Shares of Bristol-Myers Squibb Co (NYSE: BMY) are up more than 3.0% on Monday after the pharmaceutical company said it will repurchase $5.0 billion worth of its stock in Q1.
CEO says business development is a priority
Interestingly, however, CEO Giovanni Caforio says business development is a priority for Bristol-Myers. In his interview with CNBC, he said:
Our innovation strategy is very unique. It’s based on combining the strength of our internal R&D with sourcing external innovation. That’s what makes business development the core pillar of our capital allocation strategy.
According to Caforio, Bristol-Myers will be on the lookout for companies that match its area of expertise and are valued reasonably.
Also on Monday, Bristol-Myers gave its guidance for the full year that came in line with analysts’ estimates. It forecasts cash flow to hit at least $45 billion by 2024. In the latest reported quarter, Bristol-Myers noted a 16% YoY decline in per-share earnings.
Jim Lebenthal’s bull case for Bristol-Myers
Shares of Bristol-Myers remained flat last year, but Cerity Partners’ Jim Lebenthal says it’s a good buy for 2022. On CNBC’s “Halftime Report”, he said:
BMY has climbed back from an abyss, and it will continue. If Build Back Better doesn’t include drug pricing controls, this sector is wildly undervalued. You’re supposed to buy these companies when people feel the pipeline is empty. BMY CEO told you it’s filling rapidly.
The NYSE-listed company said it will launch three new products in 2022 – relatimab/nivolumab, mavacamten, deucravacitinib). It expects Revlimid sales to hit about $10 billion this year.
At eight times earnings with a 3.5% dividend yield, Lebenthal concluded, the stock is a buy at current levels.