Citigroup Reiterates Neutral Rating, $33 PT on Bristol Myers Squibb

In a report published Friday, Citigroup reiterated its Neutral rating and $33.00 price target on Bristol Myers Squibb

. Citigroup noted, “We rate BMS Neutral. We anticipate a 2014E-19E EPS CAGR of 10%, compared with the US large cap pharma average of 7%. Among global multinationals, BMS appears most closely aligned with our ‘Shrink, Smarten and Spin' industry framework given its well-entrenched search and development strategy and historically strong execution track record...Our Target Price of $33 implies a 16x 2014E multiple, a 25% premium to our target 2014E average US large-cap pharma sector multiple of 12x, with superior non-GAAP EPS CAGR of 10% vs sector's 6%. Our DCF-derived Intrinsic Value is $32. We project free cash flows for an explicit forecast period of 10 years and thereafter apply terminal growth assumptions. Consistent with our sector methodology, we employ a CAPM-derived WACC of 8.6% and assume a 0% terminal growth rate.” Bristol Myers Squibb closed on Thursday at $32.56.