Story updated at 9:45 a.m. to reflect market activity.
Bristol-Myers Squibb was falling -0.6% to $47.72 in morning trading.
The firm reiterated its "hold" rating for the stock. The lower price target reflects lowered estimates on nivo and ipi, and increasing pressure on operational margin according to Jefferies analysts. The analysts also lowered EPS estimates by 3% to 13% from 2015 to 2018 to reflect the lower estimates for nivo and ipi.
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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 few notable 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 impressive record of earnings per share growth, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- BRISTOL-MYERS SQUIBB CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, BRISTOL-MYERS SQUIBB CO increased its bottom line by earning $1.55 versus $1.15 in the prior year. This year, the market expects an improvement in earnings ($1.78 versus $1.55).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Pharmaceuticals industry. The net income increased by 53.9% when compared to the same quarter one year prior, rising from $609.00 million to $937.00 million.
- The current debt-to-equity ratio, 0.49, 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 1.17, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has significantly increased by 244.15% to $617.00 million when compared to the same quarter last year. In addition, BRISTOL-MYERS SQUIBB CO has also vastly surpassed the industry average cash flow growth rate of 10.66%.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Pharmaceuticals industry and the overall market on the basis of return on equity, BRISTOL-MYERS SQUIBB CO has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- You can view the full analysis from the report here: BMY Ratings Report
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.