Berenberg Upgrades Bristol-Myers Squibb To Buy, Sees $77 Price Target

• Bristol-Myers Squibb Co (NYSE: BMY) shares are down 7 percent since December 22.
• Berenberg’s Laura Sutcliffe upgraded the rating for the company from Hold to Buy, while raising the price target from $74 to $77.
• The company appears well positioned to generate robust growth in the medium term, Sutcliffe stated.

Bristol-Myers Squibb outpaced its immuno-oncology [I-O] competitors in 2H15 and its anti-PD-1 drug, Opdivo, received approval in kidney cancer as well as in combination with its other I-O drug, Yervoy.

“Prescription data shown by the company at the JP Morgan healthcare conference in San Francisco earlier this month paint a clear picture of a franchise that has secured a dominant position in I-O,” analyst Laura Sutcliffe wrote. While there would be a number of strong competitors for Bristol, its business is expected to perform “very well in 2016 and beyond.”

The Berenberg report further noted, “Bristol also has a well-stocked early-stage pipeline of candidate molecules in development as the medical community seeks to further realise the potential of I-O.”

Bristol-Myers Squibb’s cardiovascular drug Eliquis managed to capture 36 percent of the new oral anticoagulant [NOAC] market by script numbers. This was better than expectations, and there could be “more to come over the next few years,” Sutcliffe mentioned.

The analyst had been concerned about the risk associated with the company’s “heavy future reliance” on its I-O franchise and on Eliquis. She added, however, that developments during the latter half of 2015 had “assuaged our concerns,” and the company seems to be “in a very good place to deliver strong growth in the medium term.”