Bristol-Myers Squibb Company (NYSE:BMY) shares fell 4.8% to US$62.04 in the week since its latest yearly results. It was an okay result overall, with revenues coming in at US$26b, roughly what analysts had been expecting. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.
Following the latest results, Bristol-Myers Squibb's eleven analysts are now forecasting revenues of US$42.1b in 2020. This would be a huge 61% improvement in sales compared to the last 12 months. Statutory earnings per share are forecast to nosedive 27% to US$1.48 in the same period. Before this earnings report, analysts had been forecasting revenues of US$42.1b and earnings per share (EPS) of US$4.00 in 2020. So there's definitely been a decline in analyst sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.
The consensus price target held steady at US$72.20, with analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Bristol-Myers Squibb, with the most bullish analyst valuing it at US$80.00 and the most bearish at US$63.00 per share. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
It can also be useful to step back and take a broader view of how analyst forecasts compare to Bristol-Myers Squibb's performance in recent years. It's clear from the latest estimates that Bristol-Myers Squibb's rate of growth is expected to accelerate meaningfully, with forecast 61% revenue growth noticeably faster than its historical growth of 9.6%p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.1% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Bristol-Myers Squibb is expected to grow much faster than its market.
The Bottom Line
The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - and our data does suggest that Bristol-Myers Squibb's revenues are expected to grow faster than the wider market. The consensus price target held steady at US$72.20, with the latest estimates not enough to have an impact on analysts' estimated valuations.
With that in mind, we wouldn't be too quick to come to a conclusion on Bristol-Myers Squibb. Long-term earnings power is much more important than next year's profits. We have forecasts for Bristol-Myers Squibb going out to 2024, and you can see them free on our platform here.
You can also see whether Bristol-Myers Squibb is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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