Proactive Investors - Bristol-Myers Squibb (NYSE:BMY) Co (NYSE:BMY, ETR:RM, OTC:BMYMP) has been downgraded by Bank of America (NYSE:BAC) (BoA) analysts given the mixed performances of the drugmaker’s newly launched products and lack of clarity on long-term growth.
They lowered their rating on the stock from ‘Buy’ to ‘Neutral’ and slashed their price target from US$68 to US$60.
Shares of Bristol-Myers Squibb traded flat at about US$53 on Wednesday afternoon.
The BoA analysts wrote that their previous thesis had been that new products would ultimately fill the hole left by the loss of exclusivity (LOE) for Bristol products such as blood clot treatment Eliquis and cancer drug Opdivo and drive multiple expansion.
“However, sales performance from new launches has been mixed; even with impressive aggregate growth of the new launch portfolio (87% in 2022, 81% in 2023), there has not been breakout product demand that has raised peak sales forecasts,” they wrote in a note to clients.
They project that, including an impact for newly announced deals such as its acquisition of radiopharmaceutical company RayzeBio (NASDAQ:RYZB), launch portfolio growth looks linear from $3.7 billion, 8% of 2023 revenues, to $18 billion by the end of 2027, 35% of revenues.
They believe this may not be enough to get to a compelling long-term revenue and adjusted earnings per share (EPS) growth profile.
“Hence, while we could see modest multiple expansion in 2024, we still expect investors to remain focused on the LOE headwinds especially if we don't see a material inflection in demand from new launches,” they wrote.
“We view the inflection point as more of a 2025 story (not 2024) and are moving to ‘Neutral.’”