Societe General applauds Bristol-Myers’ ‘bold’ deal, double upgrades to Buy

As previously reported, Societe Generale analyst Justin Smith double upgraded Bristol-Myers (BMY) to Buy from Sell as he believes investors’ concerns about how the acquisition of Celgene (CELG) could weaken its long-term growth profile are adequately discounted at the stock’s current levels. He also applauds management for making “such a bold strategic move,” contending that improved cash flow and a higher R&D budget for the combined company should help it navigate past medium-term patent expirations while simultaneously growing the dividend. He assigns an 80% probability of the acquisition closing, but “cannot dismiss the risk of counter-bids on either side of this deal,” Smith added. He raised his price target on Bristol-Myers shares to $60 from $47.

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