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Bristol-Myers Squibb (BMY) Gains But Lags Market: What You Should Know

Zacks Equity Research
Federated Investors (FII) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

In the latest trading session, Bristol-Myers Squibb (BMY) closed at $46.80, marking a +0.2% move from the previous day. The stock lagged the S&P 500's daily gain of 0.22%. Meanwhile, the Dow gained 0.15%, and the Nasdaq, a tech-heavy index, added 0.6%.

Prior to today's trading, shares of the biopharmaceutical company had lost 13.2% over the past month. This has lagged the Medical sector's loss of 0.07% and the S&P 500's gain of 2.39% in that time.

Investors will be hoping for strength from BMY as it approaches its next earnings release, which is expected to be April 25, 2019. In that report, analysts expect BMY to post earnings of $1.07 per share. This would mark year-over-year growth of 13.83%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.80 billion, up 11.67% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.16 per share and revenue of $23.86 billion, which would represent changes of +4.52% and +5.75%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for BMY. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. BMY is currently a Zacks Rank #4 (Sell).

Looking at its valuation, BMY is holding a Forward P/E ratio of 11.23. Its industry sports an average Forward P/E of 15.52, so we one might conclude that BMY is trading at a discount comparatively.

Meanwhile, BMY's PEG ratio is currently 2.38. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Large Cap Pharmaceuticals industry currently had an average PEG ratio of 2.15 as of yesterday's close.

The Large Cap Pharmaceuticals industry is part of the Medical sector. This group has a Zacks Industry Rank of 104, putting it in the top 41% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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