Skip to Content
Stock Analyst Update

Strong Results for Bristol, Buoyed by COVID-19 Stocking

We continue to view the wide-moat company as fairly valued, with the market appropriately appreciating the heavy patent losses over the next five years.


Bristol-Myers (BMY) reported solid first-quarter results ahead of both our and S&P CapIQ consensus expectations, but the majority of the outperformance (5% of sales) was driven by coronavirus stocking that we expect to reverse later in the year, so we don’t expect any major changes to our fair value estimate. We continue to view Bristol-Myers as fairly valued, with the market appropriately appreciating the heavy patent losses over the next five years (including oncology drugs Revlimid, Abraxane, and Pomalyst) offset by a strong pipeline and an entrenched drug portfolio, which also supports our wide-moat rating.

In the quarter, Bristol posted sales growth of 13% (excluding the impact of the Celgene acquisition). The acquired multiple myeloma drugs Revlimid (up 14%) and Pomalyst (up 29%) continue to make gains as duration of patient treatment expands, showing the strong efficacy of the drugs and a seamless transition to Bristol. These leading drugs look well positioned until generics emerge, but we expect other drugs to offset these generic pressures. Cardiovascular drug Eliquis (up 37%) looks well positioned based on a superior efficacy and side effect profile to continue to gain market share from older drug warfarin. While sales from cancer drug Opdivo fell 2%, as the important lung cancer market continues to change over to competing drugs in the first-line setting away from Opdivo in the second-line setting, we expect Opdivo to return to growth in 2021. The likely approvals of Opdivo with cancer drug Yervoy (May 2020) and with chemotherapy (August 2020) in the first-line lung cancer setting along with the likely approval in renal cancer with cabozantinib (late 2020) should help return Opdivo to growth. Further adding overall support, the recent approvals of Zeposia (multiple sclerosis) and Reblozyl (blood disorders) along with filings of blood cancer drugs liso-cel, bb2121, and CC-486 should set the firm up well to manage through the patent losses on older drugs.

Morningstar Premium Members gain exclusive access to our full analyst reports, including fair value estimates, bull and bear breakdowns, and risk analyses. Not a Premium Member? Get this and other reports immediately when you try Morningstar Premium free for 14 days.

Damien Conover does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.