After losing by 7.42% on Monday, Bristol-Meyers Squibb [NYSE: BMY] is recovering in pre-market trading. The stock is trading at $45.90 up a bit in pre-market. While it’s a minor gain in value, it goes to show that investors are positive on this stock. That’s in spite of news that there could be anti-trust concerns around its merger with Celgene. Earlier along, the Wall Street Journal reported that BMY’s merger with Celgene in a $74 billion deal would be delayed. The delay gives the company time to ease some of the anti-trust concerns that regulators may have about it. One of the steps it is taking is to sell off one of Celgene’s drugs. The anti-inflammation drug that they are selling raked in $1.6 billion for Celgene in last year’s sales. By easing up on regulatory issues, the company expects to complete the merger deal, either by the end of 2019 or in early 2020.
The positive investor sentiment around this stock even with the complexities around this merger is an indicator of the company’s strong fundamentals. For instance, its revenues are getting stronger, and it expects 2019 revenues to hit $41.3 billion. That’s higher than the projections that analysts have for the year. Analysts expect BMY to report 2019 revenues of $24.13 billion and Celgene to generate $17.13 billion. This leads to a total revenue expectation of $41.26 billion. In essence, even without the merger deal, BMY’s revenues are solid and anchor the company’s value. The company’s other fundamentals are also strong. For instance, its top and bottom-lines are growing pretty well, as seen in its profit figures. From its financial records, the company last reported revenues of $23.29 billion, with a quarterly revenue growth (yoy) of 14%. Its profit margins have also been getting stronger, recording a profit margin of 22.09% on a gross profit of $16.07 billion.
With such strong fundamentals, and the deal with Celgene likely to close soon, BMY has growth potential going forward.