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Bristol-Myers Squibb Q3 Earnings: Can NYSE:BMY Hit Its $1.49 EPS Target?

in EARNINGS/INVESTING IDEAS by

Bristol-Myers Squibb Company (NYSE:BMY) is scheduled to report Q3 earnings results on November 5, 2020.

The company is expected to report earnings of $1.49/share on revenue of $10.33 billion. The consensus earnings per share (EPS) of $1.49/share is based on a poll of 15 analysts and represents a growth in eps of 27.1% over the same quarter last year, when the company reported earnings of $1.17/share.

The revenue forecast of $10.33 billion based on a poll of 12 analysts implies a year-over-year (YoY) growth in revenue of 72.0%. Last year the company reported $6.007 billion in revenue for the quarter.

Expected to report EPS growth of 27.1% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $10,330.27 $6,007.00 72.0%
EPS $1.49 $1.17 27.1%

Earnings Call Trends

Management has been great at managing analyst expectations historically. The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance.

What are your expectations from Bristol-Myers Squibb Company for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $1.48 $1.63 10.2% Beat
Q1, 2020 $1.45 $1.72 18.8% Beat
Q4, 2019 $1.16 $1.22 5.2% Beat
Q3, 2019 $1.07 $1.17 9.4% Beat
Q2, 2019 $1.06 $1.18 10.8% Beat
Q1, 2019 $1.08 $1.10 1.5% Beat
Q4, 2018 $0.85 $0.94 10.9% Beat
Q3, 2018 $0.91 $1.09 19.4% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 2.2%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 6, 2020 $59.69 $61.02 2.2% Increase
May 7, 2020 $61.13 $61.05 −0.1% Decline
February 6, 2020 $65.59 $66.25 1.0% Increase
October 31, 2019 $56.87 $57.16 0.5% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −1.81, the model suggests that the company is a possible earnings manipulator. A value of −1.81 implies a 3.5% chance of earnings manipulation.

Fundamentals And Technical Analysis

Bristol-Myers Squibb Company is currently trading at $58.10/share, down −1.1% for the day. The company is trading at approximately 85.0% of its 52-week high of $68.34/share. The company’s stock price is down −4.8% since the last earnings report and down −3.2% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 41.40 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:BMY Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −231.54 and a forward P/E multiple of 9.32.

Bristol-Myers Squibb Company’s current share price also implies a price-to-book (P/B) multiple of 2.66. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $58.10
P/E Ratio −231.5x
P/E Ratio (Fwd) 9.3x
PEG Ratio 2.2
Total Debt / Total Capital 26.4%
Levered Free Cash Flow $11.999 billion
EV / EBITDA 10.8x

Finbox

Bristol-Myers Squibb Company is a large-cap stock with a market capitalization of $132.4 billion and a total enterprise value of $157.7 billion. The company operates in the Healthcare sector and the Pharmaceuticals industry.

Bristol-Myers Squibb Company discovers, develops, licenses, manufactures, markets, distributes, and sells biopharmaceutical products worldwide. It offers products in the following therapeutic classes: hematology, oncology, cardiovascular, and immunology. The company’s products include Opdivo, a biological product for anti-cancer indications; Eliquis, an oral inhibitor targeted at stroke prevention in adult patients with non-valvular atrial fibrillation, and the prevention and treatment of venous thromboembolic disorders; and Orencia, a biological product for adult patients with active RA and prostate-specific antigen, as well as reducing signs and symptoms in pediatric patients with active polyarticular juvenile idiopathic arthritis. It also provides Sprycel, a tyrosine kinase inhibitor for the treatment of Philadelphia chromosome-positive chronic myeloid leukemia; Yervoy, a monoclonal antibody for the treatment of patients with unresectable or metastatic melanoma; Empliciti, a humanized monoclonal antibody for the treatment of multiple myeloma; and Baraclude, an oral antiviral agent for the treatment of chronic hepatitis B. In addition, it offers Reyataz, a protease inhibitor for the treatment of human immunodeficiency virus (HIV); Sustiva franchise, a non-nucleoside reverse transcriptase inhibitor for the treatment of HIV; and Daklinza NS5A replication complex inhibitor, Sunvepra NS3 protease inhibitor, and Beclabuvir NS5B inhibitor. It sells products to wholesalers, retail pharmacies, hospitals, government entities, and medical profession. The company has collaboration agreements with Pfizer, Otsuka, Ono, Nektar, GRYT Health, and Ubiquigent Limited; clinical collaboration agreement with NeoImmuneTech, Inc.; and partnership with Astrazeneca Plc. The company was formerly known as Bristol-Myers Company and changed its name to Bristol-Myers Squibb Company in 1989. Bristol-Myers Squibb Company was founded in 1887 and is headquartered in New York, New York.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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