NEW YORK (TheStreet) -- Shares of Bristol-Myers Squibb Co (BMY) were slightly lower by 0.08% to $65.92 in mid-morning trading Wednesday, after analysts at Piper Jaffray initiated coverage on the pharmaceutical company earlier today.
The firm issued an "underweight" rating with a $60 price target, noting Bristol's relatively weak earnings performance.
Piper Jaffray said shares of the drug maker are "modestly overvalued" at current levels.
Analysts added that they see risk to Bristol's Immuno-Oncology dominance given the industry's fast pace of change.
New York City-based Bristol-Myers Squibb is engaged in the discovery, development, licensing, manufacturing, marketing, distribution and sale of biopharmaceutical products.
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 revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, 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 2.1%. Since the same quarter one year prior, revenues slightly increased by 6.0%. Growth in the company's revenue appears to have helped boost the 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 1.42, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has slightly increased to $626.00 million or 1.45% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -23.98%.
- The gross profit margin for BRISTOL-MYERS SQUIBB CO is currently very high, coming in at 84.46%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 29.34% trails the industry average.
- Powered by its strong earnings growth of 26.78% and other important driving factors, this stock has surged by 40.22% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- You can view the full analysis from the report here: BMY Ratings Report