Top Stock Buys: Bristol-Myers and Newell Brands
Since May 2024, Bristol-Myers Squibb (BMY) traded lower, finding support at $39.35. Investors who accumulated the stock at that time are happy. BMY stock gained 18% last week. The firm posted Q2 results that exceeded estimates and announced a clinical trial win. Bristol-Myers stock rebounded to April levels after reporting $12.2 billion in revenue, up by 9% Y/Y. It attributed the strength to Eliquis, a blood thinner. The firm marketed the drug with Pfizer (PFE). Net income fell by 19% Y/Y to $1.7 billion, which the company included a one-off impairment charge item.
For FY 2024, Bristol-Myers expects an adjusted EPS of $0.60 – $0.90, up from $0.40 to $0.70. Additionally, revenue will grow at the upper end of the low single-digit range. In the consumer goods space, Newell Brands (NWL) gained 40.54% after posting a Q2 EPS of $0.36. The stock is still inexpensive at a non-GAAP forward P/E of 14.6 times.
Newell raised its Q3 forecast. It expects net sales to fall by up to 6%. Its FY 2024 outlook, however, is better. It increased its adjusted EPS to $0.60 to $0.65. The firm’s new corporate strategy, announced last year, is paying off. In the last year, Newell invested in innovation, and brand building, and focused its efforts on its profitable brands and markets.
Phillips Pops on Latest Earnings
Shares of Dutch device maker Philips (NYSE:PHG) jumped in early deals Monday after the company reported better-than-expected second-quarter earnings. The stock traded up $3.19, or 12.4%, by 9:30 a.m. New York time to $28.93.Comparable group sales rose 2% to 4.5 billion euros ($4.88 billion U.S.), as demand in North America held strong, even as China sales dipped.
The company, which makes medical devices and personal care products such as electronic toothbrushes, also saw its comparable order intake grow 9% over the three-month period. Philips said the waning China demand was due in part by Beijing’s drive towards self-sufficiency in critical technologies, including within healthcare, amid rising U.S.-China tensions. However, it added that the country remains a “fundamentally attractive growth market.”
CEO Roy Jakobs told the media that he was encouraged by the “robust” second-quarter results, adding that he had “strong confidence” that the company would meet its full-year guidance of comparable sales growth of 3-5%.
“Within a challenging macro environment we achieved strong margin improvement, supported by our productivity program, solid operational cashflow due to improved working capital management and comparable sales growth in line with our plan,” Jakobs added in a statement.
The company reported a number of cost savings over the period, including productivity savings of 195 million euros across operating model savings of 57 million euros, procurement savings of 71 million euros, and other programs’ savings of 67 million euros. Since 2022, Philips has embarked in a reorganization set to cut roughly 10,000 jobs, or 13% of Philips’ workforce as of January last year.
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