Bank of America analysts downgraded shares of Bristol-Myers Squibb (NYSE:BMY) to Neutral from Buy in a note Wednesday, lowering the stock price target to $60 from $68 per share.
Analysts told investors that their firm is still awaiting more clarity on the company's commercial execution/success.
"Our prior thesis was that the LOEs (loss of exclusivity) for Bristol were well-known (e.g. Eliquis, Opdivo) and that upside from the new product portfolio could ultimately fill the LOE hole and drive multiple expansion," the analysts explained. "However, sales performance from new launches has been mixed; even with impressive aggregate growth of the new launch portfolio (~87% in 2022, ~81% in 2023e), there has not been breakout product demand that has raised peak sales forecasts."
They added that the product differentiation profile across the launch portfolio is compelling and exciting. However, "even assuming an impact from announced new deals (see our Mirati, Karuna, and Rayze notes), launch portfolio growth looks more linear, from $3.7B (8% of 2023e total revenues) to $18B (35% of 2027e total revenues)," said the analysts.
BofA believes this may not be enough to get to a compelling long-term revenue/adjusted EPS growth profile. While they can see BMY experiencing a modest multiple expansion in 2024, BofA analysts still expect investors to remain focused on the LOE headwinds. The bank views the inflection point as more of a 2025 story.