Analyst: Positive Catalysts Can't Save This Pharma Stock

Biopharmaceutical stock Bristol-Myers Squibb Co (NYSE:BMY) is in focus this morning, after a downgrade to "neutral" from "buy" at Redburn-Atlantic. The analyst in coverage also lowered its price target to $54 from $77 -- still a 12.6% premium to last night's close at $47.98. BMY is fractionally lower before the open.

The Wall Street analyst cited concerns regarding Bristol-Myers Squibb's product pipeline and market challenges. It argued that any positive impact from the company's recent acquisitions won't be enough to overcome headwinds against its key products.

Leerink Partners and Morgan Stanley yesterday cut their price targets on BMY, yet the average 12-month target price of $58.20 is still a 21.3% premium to last night's close, indicative that more bear notes could be on the way.

Bristol-Myers Squibb stock is underperforming the broader market, down 6.5% in 2024 versus the SPDR S&P 500 ETF Trust's (SPY) 3.6% year-to-date lead. The equity is down 35.6% over the last 12 months, and just yesterday fell to a nearly four-year low of $47.68.

Short-term options traders are also more pessimistic than usual. This is per BMY's Schaeffer's put/call open interest ratio (SOIR) of 0.73 that ranks higher than 92% of readings from the past 12 months.

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