Morgan Stanley Says 'Buy The Leader In IO,' Upgrades Bristol-Myers To Overweight
In a report published Tuesday, analysts at Morgan Stanley upgraded Bristol-Myers Squibb Co. (NYSE: BMY) from Equal-Weight to Overweight. The price target has also been raised from $60 to $80. The analysts believe that Bristol-Myers is the only company in the Major Pharma segment that is likely to significantly exceed the consensus in 2015-2016.
"Following confirmation of a survival benefit in nonsquamous lung cancer on April 17, we now project 2016 EPS 16% above consensus and believe BMY features a favorable risk reward (profile)," the analysts say.
The survival benefits reported for Bristol-Myers' Opdivo, along with the company's earlier-stage immuno-oncology line-up, is likely to prove successful, especially given the various areas of unmet needs in lung cancer treatment. The analysts expect Opdivo to be "one of the top three pharmabio drug launches over the next few years."
Morgan Stanley has raised its estimates for the company, given that the analysts expect Bristol-Myers to exceed the consensus EPS estimates for 2016 by 16 percent.
"The key driver is higher Opdivo (a cancer checkpoint inhibitor) estimates (we raised 2016 global Opdivo revenue from $2.1B to $3.3B), but 2016E company revenues are offset by revenue reductions for Yervoy (cannibalization by Keytruda and Opdivo) and Erbitux," the analysts explained.
The analysts expect the company's share price to rise with an increase in the consensus projections and with investors better appreciating the leading position held by Bristol-Myers in the immuno-oncology market.
Latest Ratings for BMY
Apr 2015 | Morgan Stanley | Upgrades | Equal-weight | Overweight |
Mar 2015 | Leerink Swann | Maintains | Outperform | |
Mar 2015 | JP Morgan | Maintains | Overweight |
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