Shortly after the opening bell, we will purchase 300 shares of Bristol Myers Squibb at approximately $56.50. As a result of the transaction, Jim Cramer’s Charitable Trust will hold 1,200 shares of BMY, increasing its weighting in the portfolio to approximately 1.9% from approximately 1.4%. Wall Street’s bad zone may have finally caught up. The S&P Short Range Oscillator, our sentiment momentum indicator, was oversold after Friday’s mixed session, falling to minus 4.1%. When the oscillator becomes oversold, our discipline says it is time to be opportunistic and buy stocks of quality companies. In Thursday’s edition of Hometretch, we pointed out that Bristol Myers Squibb’s recent slide into the mid-50s seemed like an opportunity, especially since it meant the stock had given up about half of its gains resulting from the failure of AbbVie’s rival schizophrenia test. medicine. Jefferies analysts now share our long-term bullish view on Bristol Myers. Analysts upgraded their rating to buy from hold on Monday and raised their price target to $70 from $63. Jefferies provided three main reasons for its call, suggesting a 25% upside from the stock’s current price. Analysts say Cobenfy, the pharmaceutical maker’s top schizophrenia drug, is poised to become a major blockbuster. They are currently modeling peak sales of $11 billion for the drug, well above the current Wall Street consensus of $6 billion. Jefferies is also more optimistic about the Bristol Myers pipeline. One of the drugs highlighted by analysts is Milvexian, an anticoagulant drug currently in three advanced trials for atrial fibrillation, acute coronary syndrome and secondary stroke prevention. Jefferies’ third bullish point was greater P&L visibility and Bristol Myers’ ability to ride out the next patent cliff, particularly thanks to higher Cobenfy sales. We agree with these three reasons and think stock trading below 8 times estimated 2025 earnings per share with a 4.4% dividend yield is too cheap. We first purchased Bristol Myers in late November and recently added to our position on December 4th. (Jim Cramer’s Charitable Trust is long BMY. See here for a complete list of stocks.) As a subscriber to CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after a trade alert is sent before buying or selling a stock in his charity’s portfolio. If Jim talked about a stock on CNBC TV, he waits 72 hours after the trade alert is issued before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, AS WELL AS OUR DISCLAIMER. NO OBLIGATION OR FIDUCIARY OBLIGATION EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULTS OR PROFITS ARE GUARANTEED.
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