Shortly after the market opens, we will buy 300 shares of Bristol-Myers Squibb stock at approximately $56.50. Upon completion of the transaction, Jim Cramer’s Charitable Trust will hold 1,200 shares of BMY stock, increasing its weight in the portfolio from approximately 1.4% to approximately 1.9%. Wall Street may have finally caught up with its badness. Our trusted momentum indicator, the S&P Short-Term Oscillator, hit oversold after a mixed session on Friday, falling to -4.1%. When an oscillator is oversold, our discipline indicates it’s time to take advantage and buy shares of quality companies. In Thursday’s edition of the Hometretch , we pointed out that Bristol Myers Squibb’s recent slide to the mid-$50s looked like an opportunity, especially since that meant the stock had given back about half its gains from the trial failure of AbbVie’s rival schizophrenia Drugs. Jefferies analysts now agree with our bullish long-term view on Bristol Myers. Analysts upgraded the stock to buy from hold on Monday and raised the price target to $70 from $63. Jefferies gave three main reasons for their decision, which suggests there is room for 25% upside from the stock’s current price. Analysts believe the drugmaker’s first-in-class schizophrenia drug Cobenfy is expected to be a blockbuster. They currently model peak sales for the drug at $11 billion, well above the current Wall Street consensus of $6 billion. Jefferies has also become more optimistic about Bristol-Myers Squibb’s pipeline. One drug highlighted by analysts is Milvexian, a blood-thinning drug currently in three late-stage trials targeting atrial fibrillation, acute coronary syndrome and secondary prevention of stroke. Jefferies’ third bullish point is more understanding of the income statement and Bristol-Myers’ ability to weather the coming patent cliff, particularly from higher Cobenfy sales. We agree with all three reasons and think the stock, trading at less than 8 times projected 2025 EPS and with a dividend yield of 4.4%, is too cheap. We first bought Bristol Myers in late November and most recently added to our holdings on December 4th. Cramer, you will receive a trade alert before Jim places a trade. Jim waits 45 minutes after sending a trade alert before buying or selling stocks in his charitable trust portfolio. If Jim talked about a stock on CNBC TV, he would wait 72 hours after issuing a trade alert before executing the trade. The investment club information above is subject to our Terms and Conditions and Privacy Policy and our Disclaimer. No fiduciary duty or obligation is created or created by any information you receive in connection with the Investment Club. No specific results or profits are guaranteed.
