Bristol-Myers (BMY) Stock: Look for an Upside Breakout - TheStreet

NEW YORK (TheStreet) -- Big pharma has been in the news lately and this prompted us to take a look at Bristol-Myers Squibb (BMY) - Get Report .

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This chart of BMY shows that we are within striking distance of a new high. The On-Balance-Volume (OBV) line is bullish in that the OBV line has already made a new high for the move up, foreshadowing a new price high. The 50-day Moving Average (MA) is bullish as prices are above the MA, and the slope of the average is positive. Also we don't see any meaningful bearish divergences to worry about.

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This longer-term chart, above, of BMY supports a bullish stance. Prices are above the 40-week MA and the average is just now having a positive slope. The OBV line is bullish as it moves up along with price. Last, the Moving Average Convergence Divergence oscillator has crossed over above the zero line. These two charts give me enough confidence to anticipate an upside breakout for BMY.

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This point and figure chart, above, gives an upside price target of $80 for BMY. In this deal-driven market, anything is possible.

Separately, TheStreet Ratings team rates BRISTOL-MYERS SQUIBB CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate BRISTOL-MYERS SQUIBB CO (BMY) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • BMY's revenue growth has slightly outpaced the industry average of 4.5%. Since the same quarter one year prior, revenues slightly increased by 3.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The current debt-to-equity ratio, 0.48, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.14, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for BRISTOL-MYERS SQUIBB CO is currently very high, coming in at 77.81%. Regardless of BMY's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BMY's net profit margin of 17.35% compares favorably to the industry average.
  • BRISTOL-MYERS SQUIBB CO' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, BRISTOL-MYERS SQUIBB CO reported lower earnings of $1.20 versus $1.55 in the prior year. This year, the market expects an improvement in earnings ($1.85 versus $1.20).
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Pharmaceuticals industry average. The net income has decreased by 2.1% when compared to the same quarter one year ago, dropping from $721.00 million to $706.00 million.
  • You can view the full analysis from the report here: BMY