Earnings Previews: Bristol-Myers Squibb, ConocoPhillips, Merck, Sirius XM

Two new immunotherapies for melanoma and metastatic non-small cell lung cancer will be heavily promoted directly to consumers through TV ads. Bristol-Myers Squibb also has agreed to settle a lawsuit by two former employees who were fired for refusing to get COVID-19 vaccinations in 2021.

Of 24 analysts covering the drugmaker, 11 have a Buy or Strong Buy rating and 12 rate the stock at Hold. At a recent share price of around $72.00, the implied upside on the stock at a median price target of $83.00 is about 15.3%. At the high price target of $95.00, the upside potential is nearly 32%.

For the company’s fiscal fourth quarter, analysts are expecting revenue of $11.2 billion, which would be a decrease of 0.15% sequentially and 6.5% year over year. Adjusted EPS are tabbed to come in at $1.73, down by 13.3% sequentially and 5.5% lower year over year. For the full 2022 fiscal year, the revenue estimate is $45.91 billion, down about 1.0%, and the EPS estimate is $7.61, up 1.3%.

Bristol-Myers stock trades at about 9.5 times expected 2022 EPS, 9.0 times estimated 2023 earnings of $7.98 and 8.8 times estimated 2024 earnings of $8.20 per share. The stock’s 52-week trading range is $62.90 to $881.44. The company pays an annual dividend of $2.28 (yield of 3.15%). Total shareholder return for the past year was 14.3%.

ConocoPhillips

Over the past 12 months, shares of ConocoPhillips (NYSE: COP) have added 35.1% to their value. That gain is about half as much as the 70% gain the shares had put up for the 12 months preceding their third-quarter earnings. Both Chevron and Exxon Mobil noted the lower price for crude oil and natural gas in the December quarter, and Conoco is highly likely to feel the same pinch. The company reports December-quarter results early Thursday.

The company has begun discussions with Venezuela’s national oil company to recover some $10 billion that Conoco had to write off when its Venezuelan assets were nationalized in 2007. Conoco is also awaiting a decision from the Biden administration that would allow the company to proceed with its $8 billion Willow project in the National Petroleum Reserve-Alaska.

There are 28 brokerages covering the company, and 22 have ratings of Buy or Strong Buy. Four rate the stock at Hold. At a share price of around $120.50, the upside potential based on a median price target of $140.00 is about 16.3%. At the high price target of $160.00, the upside potential is about 32.8%.

For the fourth quarter, analysts expect revenue of $18.16 billion, down 16.0% sequentially but up 13.8% year over year. Adjusted EPS are expected to come in at $2.90, down 19.6% sequentially and up 27.8% year over year. For the full 2022 fiscal year, Conoco is expected to report EPS of $13.60, up 126.2%, on sales of $78.8 billion, up 63%.

Conoco stock trades at 8.9 times expected 2022 EPS, 9.5 times estimated 2023 earnings of $12.66 and 11.1 times estimated 2024 earnings of $10.87 per share. The stock’s 52-week range is $78.30 to $138.49. The company pays an annual dividend of $2.37 (yield of 1.92%). Total shareholder return for the past 12 months was 41.8%.

Merck

Dow Jones industrial average component Merck & Co. Inc. (NYSE: MRK) has added about 31.1% to its stock price over the past 12 months. The pharmaceutical giant’s $37 billion pursuit of Seagen fizzled, but a new partnership with Moderna has produced a good result for treating stage 3 or 4 melanoma for a cocktail of Merck’s Keytruda cancer drug and Moderna’s mRNA-4157. If further trials are also successful, Keytruda may continue to pay off for Merck long after the company loses patent protection on the drug in 2028. Merck reports results before U.S. markets open Thursday.