IBD's Rising Profits Estimates screen finds top-ranked stocks with brightening profit outlooks. Health care stock Bristol Myers Squibb stands out with its consistent year-over-year earnings growth. It is a stock to study from today's Screen of the Day.
The Rising Profits Estimates screen scans for growth stocks with increased earnings estimates and high IBD ratings on key metrics such as EPS, Composite and Relative Strength Ratings.
This screen resulted in 181 stocks that met the requirements, and we are highlighting drugmaker Bristol Myers Squibb.
Earnings growth is a key component found in super-performing growth stocks. It's so crucial that the CAN SLIM investing strategy devotes two of its letters to it.
The "C" in CAN SLIM examines quarterly earnings and sales, especially in the last two quarters, while the "A" looks for annual earnings upticks.
Bristol Myers Squibb develops specialty drugs and treatments for cancers, cardiovascular diseases and fibrosis conditions. Their immunology focus includes unmet needs in rheumatology, gastroenterology, dermatology and neurology.
Bristol Myers is fourth in the ethical drugs industry group, which is ranked 125th out of the 197 IBD groups. The group has fallen out of favor, but pharmaceutical companies can be considered defensive, because medical treatments are often essential expenses, even in hard economic times.
Leading Health Stock Delivers Earnings And Dividends
Bristol Myers Squibb reported better-than-expected Q3 earnings per share and sales numbers on Oct. 25. Revenue fell by 3%, which was less than expected, but it was the first decline after three quarters of single-digit growth. The decline was due to unfavorable foreign exchange rates and a 28% decline in its Revlimid cancer drug, after generic equivalents have come to the market.
Management reaffirmed full year 2022 revenue guidance in the release.
Quarterly EPS has been in a tight range between $1.93 to $1.99 in the last three quarters.
Analysts are expecting 7% annual EPS growth in 2022 and 4% in 2023. These numbers can be found on the MarketSmith chart, in the upper left of the daily chart. A green upward arrow represents a recent increase in the annual EPS estimate.
The drugmaker has a 19% three-year EPS growth rate, according to the IBD Stock Checkup.
Bristol Myers pays out an 2.7% annualized dividend yield to shareholders, and has increased its dividend for 13 years straight.
Shares Flirt With A Buy Point
The drug stock is in an undefined base with an alternate 81.27 buy point.
BMY rose 2.6% on Oct. 21, on news that the U.S. Food and Drug Administration accepted Bristol Myers' application for its new heart drug Camzyos. The move pushed share price above its 200-day moving average.
The health stock continued climbing after Bristol Myers reported Q3 earnings in late October.
The stock got another boost on Nov. 30 in heavy volume on news it entered into a research collaboration agreement with Envisagenics on a cancer RNA splicing treatment.
Shares are up over 27% year to date, and 13% in the fourth quarter alone. BMY is within 1% of its 52-week high.
Mutual fund Fidelity Contrafund initiated a position in BMY in March, and nearly doubled its ownership in the last two quarters, to 6.2 million shares. Institutional backing is considered a positive sign for a stock, as the big money managers can drive the stock price up on large purchases.
