Bristol Myers Squibb (BMY – Free Report) was recently on Zacks.com’s list of most searched stocks. Therefore, we encourage you to consider some of the key factors that could affect the stock’s performance in the near future.
The biopharmaceutical company’s stock has returned -10% over the past month compared to a -4.6% change in the Zachs S&P 500 Composite. Zacks Medical, to which Bristol-Myers belongs, the biomedical and genetics industry, saw him lose 5.2% over the period. The key question here is where is the stock likely to go in the near future?
Media reports and rumors about significant changes in a company’s business prospects usually trigger trends in its stock price, leading to immediate price changes, but certain underlying factors that ultimately drive buy-and-hold decisions. There are always factors.
Revision of earnings forecast
Here at Zachs, assessing changes in a company’s future earnings projections is our top priority. This is because we believe the present value of future earnings streams is what determines the fair value of a stock.
Our analysis is essentially based on how sell-side analysts covering equities revise their earnings forecasts in light of the latest business developments. As a company’s earnings projections go up, so does its stock’s fair value. Also, if the fair value of a stock is higher than the current market price, investors will tend to buy the stock, resulting in an increase in its price. For this reason, empirical studies have shown that there is a strong correlation between earnings forecast revision trends and short-term stock price movements.
Bristol-Myers is expected to post earnings of $1.72 per share this quarter, representing a -6% change from the same period last year. Zacks Consensus Estimate has changed by -0.4% over the last 30 days.
The consensus expected profit for the year is $7.60, representing a +1.2% change from the previous year. Over the past 30 days, this estimate has changed by -0.2%.
The consensus expected profit for the next fiscal year is $7.89, a +3.7% change from what Bristol-Myers expected to report a year ago. Estimates have changed by -0.1% over the past month.
With a strong track record of external audits, our proprietary stock valuation tool, Zacks Rank, effectively harnesses the power of earnings forecast revisions to provide a clearer picture of near-term stock price direction. Bristol-Myers was rated at Zacks rank #3 (pending) due to the magnitude of the recent change in consensus forecasts and his three other factors related to earnings forecasts.
The chart below shows the evolution of the company’s 12-month consensus EPS forecast.
12 months EPS
Expected revenue growth rate
Earnings growth is arguably the best indicator of a company’s financial health, but if you can’t make money, nothing happens. It is almost impossible for a company to grow profitably without making a profit for a long period of time. Therefore, knowing the potential revenue growth rate of a company is very important.
For Bristol-Myers, consensus revenue for the quarter was $11.13 billion, representing a -7.2% year-over-year change. Estimates of $45.88 billion and $47.22 billion for this year and next year show changes of -1.1% and +2.9%, respectively.
Last Reported Results and Surprise History
Bristol-Myers reported revenue of $11.22 billion in its last reported quarter. At the same time her EPS was $1.99 and a year ago he was $2.
Compared to the Zacks Consensus estimate of $11.04 billion, the reported revenue represents a surprise +1.63%. EPS surprise was +8.74%.
In the last four quarters, Bristol-Myers has beaten consensus EPS estimates three times. The company beat consensus earnings estimates every time during this period.
You can’t make effective investment decisions without considering stock valuations. When predicting the future price performance of a stock, it is important to determine whether current prices accurately reflect the intrinsic value of the underlying business and the company’s growth prospects.
The current value of a company’s valuation multiples, such as price-to-earnings ratio (P/E), price-to-sales (P/S), price-to-cash-flow (P/CF), Helps to see if it’s fair valued, overvalued or undervalued, but how reasonable its stock price is when comparing the company to its peers on these parameters is well understood.
The Zacks Value Style Score (part of the Zacks Style Scoring System) pays close attention to both traditional and unconventional metrics, rating stocks from A to F (An is better than B). , B is better than C, B is better than C, etc.), identifying whether a stock is overvalued, overvalued, or temporarily undervalued. very helpful to do.
Bristol-Myers is rated A on this dimension, indicating that it is trading at a discount to its peers. Click here to see the values of some of the metrics that contributed to this grade.
The facts discussed here, along with plenty of other information about Zacks.com, may help you decide whether the market buzz about Bristol-Myers is worth paying attention to. However, Zacks ranked No. 3 suggests it may perform in line with the broader market in the near future.