Stock Analysis: BMY (Bristol Myers Squibb) A Growth Dividend Play with Momentum Challenges

BMY stock stands out with a forward P/E of 7.65, an exceptionally low PEG ratio (0.24), and massive EPS growth this year (496.84%). Combine that with a dividend yield of 5.35%, and you have a strong case for both growth and income. However, it's currently in a technical downtrend and faces high leverage (D/E: 2.95).

Fundamental Analysis

Valuation Metrics

• P/E Ratio: 17.44 (Market average)

• Forward P/E: 7.65 (Cheap based on future earnings)

• PEG Ratio: 0.24 (Strong value for growth — under 1 is great)

• P/S Ratio: 1.98

• P/B Ratio: 5.44 (A bit rich compared to book value)

📌 Key Takeaway: This is a cheap growth stock on future earnings, though not asset-heavy.

Profitability & Growth

• EPS Growth This Year: +496.84%

• EPS Growth Next Year: -11.54% (Pullback expected)

• EPS Growth Next 5Y: +72.95%

• EPS Surprise: +20.43%

• Profit Margin: 11.38%

• Gross Margin: 59.16%

📌 Key Takeaway: This stock is riding a powerful profit wave, but short-term earnings might dip before surging long-term.

Dividend & Payout

• Dividend Yield: 5.35%

• Payout Ratio: Not available (but appears reasonable vs. income)

• Cash/sh: $5.79 (healthy cash reserves)

📌 Key Takeaway: Offers attractive income and room to maintain dividend, even in volatile quarters.

Financial Strength

• Current Ratio: 1.28

• Quick Ratio: 1.17

• Debt/Equity: 2.95 (High leverage warning)

• Institutional Ownership: 82.37% (Big money is in)

📌 Key Takeaway: Balance sheet risk is present due to high debt, but institutions still back it.

Technical Analysis

Trend & Momentum

• SMA 20: -5.32%

• SMA 50: -15.56%

• SMA 200: -14.31%

• RSI (14): 30.31 (Near oversold zone)

• Beta: 0.40 (Low volatility stock)

📌 Key Takeaway: The stock is oversold and could soon reverse trend if buying pressure returns.

Support & Resistance

• 52W Range: $39.35 - $63.33

• Current Price: $46.45

• Support: $44.00 - $45.00

• Resistance: $50.00, $56.05 (Target Price)

📌 Key Takeaway: Sitting close to major support — attractive for entry if technicals stabilize.

Trade Setup & Plan

📌 Entry Zone

• Buy Range: $44.00 - $46.50

• Confirmation: Bounce off $44 support, RSI crosses above 35–40

🎯 Profit Targets

• Target 1: $50.00 (+7.7%)

• Target 2: $56.05 (Target Price, +21%)

• Target 3: $60.00 (+29%)

🛑 Stop-Loss Strategy

• Conservative Stop: $42.00

• Aggressive Stop: $40.00

💡 Risk-Reward Ratio: ~2.5:1(Solid entry for income + growth investors with risk tolerance for debt and volatility)

Buy or Avoid?

✅ Why Buy?

• Explosive EPS growth

• Undervalued on forward P/E and PEG

• Attractive dividend (5.35%)

• Oversold technicals, strong support nearby

❌ Risks to Consider

• 🚨 High debt-to-equity (2.95)

• Short-term EPS drop expected next year

• Momentum remains bearish (SMA200 -14.31%)