Strong fundamentals make Bristol Myers Squibb stock a real value

Bristol Myers Squibb Company (NYSE: BMY) made a small profit after a profit report; the company beat its top and bottom lines. The pharmaceutical company achieved earnings per share (EPS) of $1.99 on revenue of $11.22 billion. That beat analysts’ forecast for earnings per share of $1.83 on revenue of $11.18 billion.



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Results were lower compared to the same quarter of the previous year, but both were small losses. Earnings per share (EPS) fell by a cent and sales were down 3%.

Growth investors may be disappointed with the company’s results. However, Bristol Myers Squibb has still delivered strong results making it an attractive value stock, even if it may not be as undervalued as it once seemed.

BMY stocks remain a strong fundamental choice

Bristol Myers Squibb has a profit margin of more than 14%, which is better than 86% of companies in its sector. In addition, the company’s return on assets is 6.59%, better than the industry’s 91%.

The company continues to post double-digit free cash flow (FCF) revenue. Some of that FCF goes toward the dividend, which the company has raised over the past 12 years. These numbers take on added significance when you consider that the company expects to achieve single-digit growth in both sales and profits over the next five years.

The pipeline continues to flow

Bristol Myers Squibb has launched three new drugs in the past year. Each should bring in more than $4 billion in non-risk-adjusted sales by 2029. The company also expects: four more approvals by the end of 2023. The company also has a solid pipeline of at least 50 candidates.

What does it mean for investors?
Companies such as Bristol-Myers Squibb enjoy patent protection for a limited time only, as shown in this earnings report. The company said sales of Revlimid, its blockbuster cancer drug, were impacted by generic competition. Revlimid was one of three drugs, including Eliquis and Opdivo, that together accounted for about 66% of the company’s quarterly sales. Opdivo has just achieved encouraging results in a clinical trial which could expand its use in the treatment of earlier-stage melanoma.

The company reaffirmed its expectation for annual sales of Revlimid, for sales of between $9 and $9.5 billion. Chief Financial Officer David Elkins told Reuters he expects the actual number to come in at the higher end of that range.

A safe haven for volatile times

BMY stocks are up 23% in the past five years. However, it is clear that most of those gains were made in 2022. This is probably due to investors having fled in safety. In that regard, Bristol-Myers Squibb delivers consistent, profitable revenue. In addition, the company delivers a dividend that pays $2.12 annually and has a return just under 3%.

BMY stocks have recently risen above the 10, 20 and 50 day moving averages. However, the recent market rally has begun to fuel the animal spirits in the market. If that’s the case, growth investors can turn to risky assets. That could create an opportunity for value investors who should view every dip as an opportunity to buy shares of this still-undervalued stock.

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