Bristol-Myers Squibb Is a Dirt-Cheap Buy Before Earnings

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As the novel coronavirus continues to dominate the headlines, sometimes it feels like healthcare companies focused on Covid-19 are the only ones that matter. With so many companies scrambling to find a vaccine, rock-solid pharmaceutical firms like Bristol-Myers Squibb (NYSE:BMY) are ignored and traders bypass BMY stock for more exciting investments.

A Bristol-Myers Squibb (<a href=BMY) sign outside a company facility in New Brunswick, New Jersey." width="300" height="169">

Source: Katherine Welles /

Yet, even though BMY stock isn’t a fast mover and the company isn’t totally focused on finding a Covid-19 vaccine, there is still plenty of cause for excitement. After all, there’s an important event happening on Aug. 6. That’s when Bristol-Myers Squibb plans to release its second-quarter fiscal data.

Action-seeking traders will be chattering about hot stocks throughout this earnings season, no doubt. They might not pay much attention to a safety stock like BMY. After all, it’s not known to be a big mover on earnings-release days.

However, if you’re seeking consistent growth, a dirt-cheap price and a great dividend, then you really ought to give BMY stock a chance. And you never know when a “slow and steady wins the race” kind of company might surprise everyone with a huge earnings beat.

A Closer Look at BMY Stock

If a high flyer is what you’re seeking, look elsewhere. Bristol-Myers Squibb has mostly stayed out of the race for a Covid-19 vaccine. As a result, BMY stock hasn’t whipped around like a so-called coronavirus stock.

That should be perfectly fine with income-focused investors. They’ll appreciate the lack of volatility. Moreover, they’ll probably be glad to collect the forward annual dividend yield of 3.1% that BMY stock offers.

As far as the price action is concerned, BMY shares are still struggling to retake their pre-pandemic peak of $67 and change. Could an earnings-day surprise provide a welcome boost to BMY stock? There are no guarantees, but a peek into the company’s pharmaceutical portfolio could provide some insights.

Pipeline Explosion

In one of the most important pharmaceutical mergers of the past decade, Bristol-Myers Squibb completed its acquisition of Celgene last fall.

Somehow, this blockbuster of an acquisition has yet to be fully appreciated by the trading community. Given the additions to Bristol-Myers Squibb’s pharmaceutical pipeline, BMY stock should be much more expensive by now.

With the Celgene deal, Bristol-Myers Squibb added Inrebic, a bone marrow disorder treatment, to its already considerable portfolio. It also added the cancer treatments Revlimid (a well-known treatment for multiple myeloma), Abraxane, Reblozyl and Pomalyst/Imnovid.

Just Revlimid by itself brought Bristol-Myers Squibb $2.9 billion worth of total sales during the first quarter. Why haven’t traders priced all of this value into BMY stock yet?

Bristol-Myers Squibb Earnings: What’s Expected

Perhaps they’re too occupied with coronavirus stocks like Moderna (NASDAQ:MRNA) to see the underpriced asset that has been there all along.

Perhaps the upcoming earnings release will open their eyes to this outstanding opportunity. Apparently, the experts are predicting $1.43 per share in quarterly earnings for Bristol-Myers Squibb. They’re also projecting $10.08 billion in revenues for the second quarter.

Those numbers aren’t unrealistic at all. It’s entirely possible for Bristol-Myers Squibb to beat them. The suite of treatments acquired from Celgene ought to have provided a rich source of revenues throughout the second quarter.

Plus, Bristol-Myers Squibb has its own robust product pipeline including anticoagulant drug Eliquis, rheumatoid arthritis treatment Orencia, and many more. With all of that, there should be no reason for lacking revenues and earnings.

The Bottom Line

If the trading community chooses to focus its attention on coronavirus stocks, that’s understandable. Yet, it might cause people to bypass perfectly good investments like BMY stock.

Maybe a positive earnings surprise will bring more attention to Bristol-Myers Squibb. But if not, then that’s perfectly OK. It can be our little revenue-generating, dividend-paying secret.

David Moadel has provided compelling content — and crossed the occasional line — on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets. As of this writing, David Moadel did not hold a position in any of the aforementioned securities.

The post Bristol-Myers Squibb Is a Dirt-Cheap Buy Before Earnings appeared first on InvestorPlace.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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