Bristol-Myers Squibb is in an uptrend

Posted Dec 3rd 2009 5:15PM by Joseph Lazzaro
Filed under: Bristol-Myers Squibb (BMY), Stocks to Buy

Biopharmaceutical company Bristol-Myers Squibb (BMY) is performing on schedule, which is why I'm reiterating my buy rating for the company's shares, first recommended on June 1, 2009 at a price of $20.11. If you bought BMY in June, you're up about 24%.

Look for a 6-8% revenue increase for BMY in 2010, boosted by revenue gains in key proprietary drugs, led by Plavix (for the prevention of stroke, heart attack, and vascular disease). Also look for impressive results from new products Orencia (for rheumatoid arthritis) and Sprycel (for leukemia); BMY's nutritional products also should register a good year. The First Call FY2009/FY2010 EPS estimates for BMY are $2.02 to $2.21.

BMY also said it plans to split-off its 83% interest in Mead Johnson (MJN) to BMY shareholders, with $1.11 allocated for $1 worth of BMY shares.

Technically, Bristol-Myers' stock chart is strong -- an uptrend, one that recently gapped-up above $24. There will be psychological resistance at $30, but this should prove to be minor. Look for BMY to trade at/near $35 in 2010.

Stock Analysis: Bristol-Myers Squibb is a moderate-risk stock. If you've already purchased the company's shares, hold them. If not, consider buying a 25% position in BMY now; then buy another 25% in one month, if U.S. and global economic conditions don't worsen substantially. Under any circumstance, don't buy more than 75% of your BMY position before February 2010. Sell/Stop Loss if you were to buy shares in this company: $12.

- -

Disclosure: Lazzaro has no positions in stocks, but does own shares in two Pimco Bond Funds: PHDAX and PYMAX.

Tags: orencia, pharmaceuticals, plavix, sprycel