Cramer's Morning Take: Bristol Myers 12/16/24

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Jim Cramer (1:02)

Hey, it's Cramer, and this is my morning take on the market from today's CNBC Investing Club morning meeting. I think the Dow has been going down seven straight days, in part because we think that the Fed is not going to be encouraged about rain cuts.

Jeff Marks (1:15)

Yeah, there has been a lot of poor breath lately, which basically means there's been more stocks falling than rising. It has been a nice Mag-7 move the last couple days.

Jim Cramer (1:24)

It sure has.

Jeff Marks (1:24)

But this has also led to the oscillator becoming oversold, minus 4.1.

Jim Cramer (1:29)

So we're now looking to buy, and we bought something this morning that I feel really terrific about, Bristol Myers.

Jeff Marks (1:35)

Yeah, but Bristol Myers, you know, stock, we put in this out on Thursday, basically giving up about half those gains from that, the Abbe, I know, from the Abbe failure right there, which basically meant that their schizophrenia drug, Kubenfe, had a, it's basically, it's only them.

Jim Cramer (1:54)

I was thinking that it was going to be a $10 billion drug. I now think it could be $15 billion. And the reason I say that is if you add up all the anti, the convulsions that are being used, there's nothing new for 30 years for schizophrenic or for bipolar. This works. Crude orthopedics works.

Jeff Marks (2:10)

Yeah, I know when we bought it, when we started the position here, JP Morgan was saying maybe mid to high single digit billion peak sales. Jeffreys, they upgrade Bristol Myers to a buy this morning, $70 price target. They're modeling peak sales of $11 billion. So again, we're talking numbers well above street. They're also getting a little bit more comfortable around what else is in Bristol's pipeline. And then the valuation, they think earnings, the trough, which is basically, remember, they have a big patent cliff here.

Jim Cramer (2:38)

Yeah, undeniable patent cliff.

Jeff Marks (2:41)

But they think because of Cobenfi and some other things that Bristol will successfully navigate this trough and then with a multiple, call it seven, eight, nine times, nice dividend yield, 4.3%. They bumped it up last week, the dividend. Good opportunity there. So we did buy, we've been waiting for the market to become oversold.

Jim Cramer (3:02)

Right, I mean, look, we are, we're the kind of managers who just say, look, nope, can't do, can't do, can't do, can't do. And that's a good lesson, by the way. A lot of people jones for action. They gotta do something. We spend most of the time on growth portfolio saying, can't do, can't do. Like I was talking about how Lindy, I said, if you whited out the basis, if you just looked at what would be bought right now, I said, well, you know, I really like Lindy because I think they're gonna have volume growth. But we are so disciplined, we're not going to touch it. Start your day with my out look on the market every morning. Visit cnbc.com/morningtake to become a CNBC Investing Club member at a special rate today.

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