Morgan Stanley downgrades Bristol-Myers Squibb on drug pipeline concern
Uncertainty around drug developments could hold back the price of Bristol-Myers Squibb stock, according to Morgan Stanley. Analyst David Risinger downgraded the stock to equal weight from overweight on Friday, saying the long-term picture for the company's earnings power was getting less positive. "Management is delivering solid financial results, but we have less conviction that pipeline news flow will drive shares higher and we lowered LT EPS growth from 8% to 6%," the Morgan Stanley note said. The downgrade comes a day after Bristol-Myers Squibb reported weaker-than-expected earnings and revenue for the first quarter. Shares fell 4.8% after the report. Morgan Stanley cut its price target on the stock to $62 per share from $70, slightly below where the stock closed on Thursday. Based on the current pipeline, the company could see a significant earnings hit by the end of the decade, Risinger said. "We estimate that 76% of BMY's 2025e revenue will be subject to potential biosimilar and generic erosion risk by 2030. ... We look forward to Bristol's next comprehensive pipeline update in fall 2021 —management mentioned on the 1Q call that it plans to host an in-depth session to provide an update on pipeline progress and how it supports long-term potential of the company," the note said. -CNBC's Michael Bloom contributed to this story.

The New York Stock Exchange welcomes Bristol Myers Squibb on Nov. 20th, 2020. NYSE