What's Behind the Insider Buying on This High-Yield Stock?

The biopharma industry is on an upward trajectory, driven by groundbreaking advances in treatment options and a rising demand for novel therapies across oncology, immunology, and cardiovascular health. With projections calling for the global biopharmaceuticals market to grow at a stable 8.5% compound annual growth rate (CAGR) spanning 2024 to 2032, one company that might be well-poised to benefit is Bristol-Myers Squibb Company (BMY).

BMY spiked 10.5% today on the heels of poorly received trial data for a schizophrenia treatment from its rival AbbVie (ABBV), which could bode well for the previously approved drug from Bristol-Myers. Adding to its appeal, Bristol Myers not only leads in cutting-edge therapies but also offers a highly attractive dividend yield, making it a standout choice for income-seeking investors.

And what makes Bristol-Myers even more enticing now is the recent massive vote of confidence in its future, via a significant insider purchase by Chief Medical Officer (CMO) Samit Hirawat. When a top insider like Bristol-Myers Squibb’s CMO invests their own capital in the company’s shares, it’s often viewed as a bullish message by the market.

In the company’s first insider transaction in nearly a year, Hirawat bought approximately $100,000 worth of BMY stock on Nov. 1, acquiring 1,830 shares at an average price of $54.68 each. With these positive developments in play, let’s take a closer look at this healthcare powerhouse.

About Bristol-Myers Squibb Stock

New Jersey-based Bristol-Myers Squibb Company (BMY) stands out as a global leader in biopharmaceuticals, combining the scale of big pharma with biotech agility. Known for tackling serious illnesses like cancer, cardiovascular, and immunologic diseases, Bristol Myers has a powerhouse oncology lineup.  At the forefront is its blockbuster immuno-oncology drug, Opdivo, complemented by heavy hitters like Revlimid, Pomalyst, Sprycel, Yervoy, and Empliciti.

Beyond oncology, its portfolio shines with key drugs like Orencia for immunology and Eliquis for cardiovascular health. And more recently making headlines is Cobenfy, a breakthrough treatment for schizophrenia, the first novel drug for the disorder in decades. 

Valued at a market cap of around $109.8 billion, shares of this biopharma giant have staged a solid performance, posting gains of roughly 16.5% year to date. 

At 2.32 times sales, BMY is significantly more attractively priced than both the healthcare sector median and its own five-year average multiple of 3.02.

Bristol-Myers Squibb has demonstrated its commitment to shareholders with an impressive eight-year streak of consecutive dividend increases. On Nov. 1, the company paid its shareholders a quarterly dividend of $0.60 per share. Its annualized dividend of $2.40 per share translates to a generous 4.39% yield.

Bristol-Myers Stock Soars On Q3 Earnings

Shares of the drug manufacturer popped almost 6% on Oct. 31 after the company dropped its stronger-than-expected Q3 earnings report. Bristol-Myers Squibb reported impressive revenue of $11.9 billion, marking an 8% year-over-year increase and exceeding consensus estimates by 5.8%. The company’s strong performance was largely fueled by its star blood thinner drug, Eliquis, and its Growth Portfolio, which includes the cancer drug Opdivo.

Eliquis continued its impressive momentum, with an 11% sales jump to $3 billion, while the cancer treatment Opdivo raked in a solid $2.4 billion in revenue. However, these gains were partially offset by the impact of generic competition on the leukemia drug Sprycel, which experienced erosion following its loss of exclusivity.

Despite a 10% annual decline, the company’s adjusted earnings of $1.80 crushed Wall Street’s forecasts by 20.8%. 

During the quarter, Bristol-Myers achieved a major milestone by securing Food and Drug Administration (FDA) approval for Cobenfy. With Cobenfy, Bristol-Myers is not just expanding its portfolio but also marking a historic return to neuroscience, offering the first new approach to treat schizophrenia in decades.

“We made important strides in the third quarter with the landmark U.S. approval of Cobenfy in schizophrenia, continued sales momentum, strong cash flow generation and key pipeline achievements,” said CEO Christopher Boerner. 

For fiscal 2024, management upped its outlook to call for a 5% increase in total revenue, while adjusted EPS is forecast to land between $0.75 and $0.95.

What Do Analysts Expect For Bristol-Myers Squibb Stock?

Overall, the mood on Wall Street is tepid for BMY stock, which has a consensus rating of “Hold.” Of the 25 analysts in coverage, four advise a “Strong Buy,” 19 recommend a “Hold,” and the remaining two maintain a “Strong Sell.”

While BMY stock is presently trading at a premium to its average analyst price target of $53.55, the Street-high target price of $64 implies another 7% upside potential from Monday’s close.

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On the date of publication, Anushka Mukherji did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.