We came across a bullish thesis on Bristol-Myers Squibb Company (BMY) on Disruptive analytics’ Substack by Magnus Ofstad. In this article, we will summarize the bulls’ thesis on BMY. BMY Technologies, Inc. share was trading at $53.96 as of Oct 4th. BMY’s trailing and forward P/E were 22.79 and 7.70 respectively according to Yahoo Finance.
A supportive smile shared between a care facility staff member and a resident with Alzheimer’s or Dementia.
Bristol-Myers Squibb (BMY) a drug manufacturing company has traditionally focused on hematology, oncology, immunology, and cardiovascular treatments, but with many of its key drugs facing patent expirations, especially by 2028 has been focusing heavily on expanding portfolio to ensure long-term growth. For instance, hematology drugs like Revlimid, Pomalyst, and Sprycel have been solid performers but are at risk due to patent cliffs thus BMY is working to replace these with newer treatments like Reblozyl for anemia, but so far, it’s only had partial success in offsetting upcoming revenue losses.
In cardiovascular treatments, a lot is at stake on Camzyos as it has to replace Eliquis, which also faces a patent expiration in 2028. Even though the immunology segment’s drugs don’t have a patent issue sales growth has been weaker than expected, with the drug Orenzia seeing weak revenue growth and Zeposia showing potential but still growing at a low rate. Oncology, however, remains a strong suit for BMY as Opdivo continues to be a multi-billion-dollar seller and drugs like Opdualag and Krazati are showing promise in treating specific types of cancer.
Bristol Myers Squibb’s main therapeutic areas are growing steadily but not expanding rapidly. Therefore, the company’s future growth depends more on its neuroscience division. They have introduced a new schizophrenia drug called Cobenfy, which has fewer side effects compared to current treatments. This drug competes with those from AbbVie and Eli Lilly and could capture a large market share because schizophrenia is common worldwide.
BMY looks promising because it is developing the KarXT platform, which has ongoing trials for adjunctive schizophrenia and Alzheimer’s psychosis, along with plans for further studies in Alzheimer’s agitation, bipolar disorder, and other neurological conditions. BMY’s early start might make it a leader in this field. If everything goes perfectly, the stock could exceed $100, but a safer guess is between $65 and $80. Overall, BMY seems undervalued and has a lot of potential due to its progress.
Bristol-Myers Squibb Company is not on our list of the 31 Most Popular Stocks Among Hedge Funds. As per our database, 61 hedge fund portfolios held BMY at the end of the second quarter which was 57 in the previous quarter. While we acknowledge the risk and potential of BMY as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than BMY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.