Bristol-Myers Named a Bank of America Top Pick Amid Coronavirus Fallout

Bristol-Myers Squibb is tapped a Bank of America top pick amid coronavirus fallout. The New York pharma giant has a buy rating and $75 price target.
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Drugmaker Bristol-Myers Squibb  (BMY) - Get Report was added to Bank of America Merrill Lynch’s U.S. 1 List as the firm sees an underappreciated valuation especially amid the coronavirus outbreak.

Bank of America affirmed a buy rating and $75 price target on the New York company, indicating 22% potential upside from the stock’s Wednesday closing price of $61.48.

“We recently highlighted Bristol as one of our top picks in the biopharma space in our 2020 Outlook," Bank of America analysts wrote. 

And "while our thesis has not changed," the shares "are now oversold in the midst of coronavirus concerns" since they're trading at a 2020 price/earnings multiple of just 9.

The firm is bullish on the company’s 2020 and 2021 outlook, driven by upside potential in numerous new product launches in coming months and a development pipeline that the firm sees as “largely underappreciated.”

“Indeed, we think the six new launches could collectively add more than $500 million to 2020 revenue and more than $1.5 billion in 2021," Bank of America’s note said. 

And "we look to the upcoming R&D Day (April 2) to underscore pipeline breadth, including several late-stage assets that still aren’t broadly discussed,” 

Bristol-Myers is undervalued at its current level and should be trading at a 12 times multiple, according to Bank of America. But that is still below the average pharma multiple of 14 to 15 times, the firm said.

Shares of Bristol-Myers Squibb at last check were trading off 1.3% at $60.70.

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