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Is a Beat in the Cards for Bristol-Myers' (BMY) Q3 Earnings?

Bristol-Myers Squibb Company BMY is scheduled to report third-quarter 2020 results on Nov 5, before market open.

The company’s shares have lost 9.8% in the year so far compared with the industry's decline of 6.3%.

The company has delivered an earnings surprise of 8.02%, on average, in the trailing four quarters. In the last reported quarter, the company delivered an earnings surprise of 11.64%.

Let’s see how things are shaping up for the upcoming announcement.

Why a Likely Positive Surprise

Our proven model predicts an earnings beat for Bristol-Myers this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Earnings ESP: The company’s Earnings ESP is +0.44%.

Zacks Rank: It currently carries a Zacks Rank #3.

 

Bristol Myers Squibb Company Price, Consensus and EPS Surprise

 

 

Bristol Myers Squibb Company price-consensus-eps-surprise-chart | Bristol Myers Squibb Company Quote

Factors Driving Growth

Bristol-Myers’ blood thinner drug, Eliquis, was one of the top revenue generators in the previous quarter with sales of $2.2 billion, up 6% year over year. This trend has most likely continued in the to-be-reported quarter, propelled by market share increases. The Zacks Consensus Estimate for Eliquis revenues is pegged at $2.1 billion.

Sales of Bristol-Myers’ key immuno-oncology drug, Opdivo, were down 9% in the previous quarter. It remains to be seen how the drug fared in the to-be-reported quarter amid stiff competition. The drug, which is approved for multiple indications, generated sales of $1.6 billion in the last reported quarter. Nevertheless, several label expansions in the previous quarters might have driven the drug’s sales in the to-be-reported quarter. In May, the FDA approved Opdivo plus Yervoy (ipilimumab) given with two cycles of platinum-doublet chemotherapy for the first-line treatment of adult patients with metastatic or recurrent non-small cell lung cancer (NSCLC) with no EGFR or ALK genomic tumor aberrations. The FDA also approved Opdivo plus Yervoy for the first-line treatment of adult patients with metastatic NSCLC whose tumors express PD-LI>1% as determined by an FDA-approved test, with no EGFR or ALK genomic tumor aberrations. The Zacks Consensus Estimate for Opdivo revenues stands at $1.7 billion.

In November 2019, Bristol-Myers acquired Celgene Corporation. The acquisition added oncology drug, Revlimid, to Bristol-Myers’ portfolio. Revlimid was the top revenue generator in the previous quarter with sales of $2.9 billion and the trend is likely to have continued in the to-be-reported quarter as well.   Pomalyst too is likely to have boosted the top line in the quarter.

Arthritis drug, Orencia, raked in sales of $750 million in the last reported quarter and similar levels of contribution are likely to have been witnessed in the third quarter.

In April, the FDA approved Reblozyl for the treatment of patients with anemia failing an erythropoiesis-stimulating agent and requiring two or more red blood cell (RBC) units over 8 weeks in adults with very low- to intermediate-risk MDS-RS or with myelodysplastic/myeloproliferative neoplasm with ring sideroblasts and thrombocytosis. In March, the FDA also approved Zeposia (ozanimod) for the treatment of adults with relapsing forms of multiple sclerosis (RMS), including clinically isolated syndrome, relapsing-remitting disease and active secondary progressive disease. The top line is likely to have got a boost from the incremental contributions of these two drugs.

However, overall sales are likely to be affected by lower demand resulting from reduced new patient starts and fewer patient visits to physicians during the pandemic.

Operating expenses are likely to have increased in the third quarter due to costs associated with the broader portfolio, resulting from the Celgene acquisition.

Key Recent Developments

Earlier in the month, Bristol Myers announced that it will acquire clinical-stage biopharmaceutical company, MyoKardia, Inc. MYOK, for $13.1 billion, or $225.00 per share in cash. MyoKardia is developing targeted therapies for the treatment of serious cardiovascular diseases. An update on the same is expected during the call.

Other Stocks to Consider

Here are some other stocks you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this quarter.

Geron GERN has an Earnings ESP of +6.25% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Regenxbio, Inc. RGNX has an Earnings ESP of +4.76% and a Zacks Rank #3.

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