Jefferies Previews Q4 and FY2010 Earnings for Bristol-Myers Squibb (BMY)

Jefferies is out with a preview of earnings for Bristol-Myers Squibb

. In a note to clients, Jefferies writes, "We forecast 2010E revenues to grow 3% (+3% CER) to $19.35bn (Cons $19.42bn) with an estimated neutral FX impact. We model a higher gross margin of 73.8% versus 73.3% in 2009 primarily reflecting FX movements during 2010. We anticipate higher R&D costs (+4% YoY; Medarex integration), which are expected to be offset by lower MS&A (-2% YoY) and A&P costs (-11% YoY) due to the change in the Otsuka partnership agreement. As a result, we expect the operating margin to improve by 223bps to 32.1% compared to 29.9% in 2009. After assuming a slightly higher tax rate of 22.9% versus 22.2% in 2009 and a 13% decline in the average share count for 2010E, we expect 2010E EPS to increase by 18% YoY to $2.17 (Cons $2.16) versus guidance of $2.10 to $2.20." Jefferies maintains Buy with a $28.50 PT on BMY. BMY is trading today at $25.95, up 0.46% from yesterday's close.