Earnings, Opdivo Results Boost Bristol-Myers Stock

Fellow drug companies working on rival lung cancer treatments are falling

Feb 5, 2018 at 10:11 AM
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Bristol-Myers Squibb Co (NYSE:BMY) is trading up 1.4% today at $64.33, after the company posted better-than-expected earnings and said its blockbuster lung cancer treatment Opdivo -- in combination with its immunotherapy drug Yervoy -- met its goals in a late-stage study. Meanwhile, the news is pressuring shares of rival Merck (MRK), which makes a competing product. Despite these positive developments, BMY stock has yet to see any bullish attention from analysts.

In fact, the majority of covering analysts remain bearish on the security. Although Bristol-Myers sports seven "strong buy" ratings, nine other brokerage firms have "hold" or "strong sell" recommendations in place. The shares are also now trading above their average 12-month price target of $64.14. Considering all this, it wouldn't be surprising to see upgrades and/or price-target hikes come through on BMY.

It would seem options traders were betting bullishly coming into today, though. Call buying more than doubled put buying during the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), with the biggest increases in open interest occurring at the March 72.50 and 67.50 calls. The front-month February 62 call was also popular.

Looking at the charts, shares of Bristol-Myers Squibb have been bouncing mostly between $60 and $65 since late August, with a pullback earlier this month bottoming just above the 200-day moving average. Overall, BMY stock is up almost 27% year-over-year.

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