Morgan Stanley Downgrades Bristol Myers-Squibb to Equal-weight

Morgan Stanley has published a research report on Bristol-Myers Squibb

and has downgraded the company from Overweight to Equal-weight as the company is near its $34 price target. In the report, Morgan Stanley writes, "We are collapsing dapa (novel diabetes drug) sales projections (2015E goes from $750M to $12M); note we were more hopeful about potential approval than consensus which was at about $250M for 2015. More importantly, we no longer expect upside to consensus revenue for the largest launch of 2012 (novel blood thinner apixaban); we are adjusting down our apix revenue by 10-20% because warfarin may be “stickier” (i.e. tougher to convert) to apixaban if modest Pradaxa and Xarelto launches are an indication. (see new #s on p. 3). Additionally, we are also now forecasting higher costs than consensus. We now expect net cost increases associated with new launches because patent-expiration related cuts are behind the company. The key offset that yields an unchanged PT of $34 is that we extended our model from '15 to '20, so it now reflects higher LT pipeline revenue and EPS." Bristol Myers-Squibb is currently trading down $0.73 from yesterday's $33.73 closing price.