Bristol-Myers Squibb Stock Set To Outperform S&P 500 Post Coronavirus?

Bristol-Myers Squibb (NYSE: BMY) could outperform the broader S&P 500 index, going by trends seen during the 2008 slowdown. It is likely that it could bounce back strongly from the recent lows of around $53 and potentially outperform, when the coronavirus and oil price war crisis winds down. We saw the stock lose 31% of its value in the 2007-08 crisis, only to rebound 45% by early 2010, which compares with a 51% decline and 48% rebound for the S&P 500 index over the same period.

Earlier this week on Monday, March 9, the stock markets saw their biggest sell off since the 2008 crisis. There were two distinct trends driving the sell-off. Firstly, the increasing number of coronavirus cases outside China is causing mounting concerns of a global economic slowdown. Secondly, crude oil prices plummeted by more than 20% after Saudi Arabia increased production. Bristol-Myers Squibb stock fell 4% on Monday and is down by a total of 16% since early February. There has been a continued drop over the last week or so considering the impact that the Coronavirus outbreak

and a broader economic slowdown could have on its supply chain and on the company’s drugs sales, particularly in China.

Bristol-Myers Squibb has seen stellar growth over the recent years, led by its blockbuster drugs Opdivo and Eliquis, which garnered over $15 billion in sales in 2019. In fact, Eliquis has added over $1 billion in incremental revenues each year over the last 5 years. and the party is far from over. Our dashboard analysis on Bristol-Myer Squibb in Cardiovascular Drugs Market provides an in depth view on Eliquis. With the Celgene acquisition, the company is set to see more synergies, strong revenue growth, and a solid late stage pipeline, and the recent decline in stock price should be used as an opportunity for buying by long term investors, in our view.

In this analysis, we take a look at how the company’s stock reacted to the economic crisis of 2008 and compare its performance with the S&P 500. View our complete dashboard analysis on 2007-08 vs. 2020 Crisis Comparison: Bristol-Myers Squibb Stock Compared with S&P 500?

Bristol-Myers Squibb Stock versus S&P 500 Over 2020 Coronavirus/Oil Price War Crisis

  • Bristol-Myers Squibb stock declined by about 4% on Monday, March 9th, and the stock is down by about 16% since February 1, after the WHO declared a global health emergency.
  • The S&P 500 declined by 7.6% on Monday and has fallen by 23% since February 1.

Bristol-Myers Squibb versus the S&P 500 During 2007-08 Financial Crisis

  • BMY stock declined from levels of around $19 in October 2007 (the pre-crisis peak) to levels of around $13 in March 2009 (as the markets bottomed out) and recovered to levels of about $20 in early 2010.
  • Through the crisis, BMY stock declined by as much as 31% from its approximate pre-crisis peak. This marked a relatively lower decline compared to the broader S&P, which fell by as much as 51%.
  • BMY stock recovered from the lows, rising by 45% between March 2009 and January 2010. In comparison, the S&P rose by about 48% over the same period.

Conclusion

  • While Bristol-Myers Squibb’s stock has declined due to the Coronavirus/Oil Price War crisis, going by trends seen during the 2008 slowdown, it’s likely that it could bounce back strongly and potentially outperform, as the crisis winds down.
  • This compares with Johnson & Johnson, which saw slower decline and recovery as compared to the S&P 500 over the same period.

For more detailed charts and a timeline of the 2007-08 crisis, view our dashboard analysis 2007-08 vs. 2020 Crisis Comparison: Bristol-Myers Squibb Stock Compared with S&P 500.

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