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Growth of mega-blockbuster Plavix is helping Bristol-Myers Squibb (BMY) drive EPS growth up near 16% in 2008. Patent expirations loom very large in Bristol's future starting in 2011 when the Plavix patent expires.
That being said, the company does have an attractive mid-to-late-stage pipeline, and the company has been dramatically working to reduce costs and shed less profitable and non-core businesses. We believe the company is an attractive take-over candidate at this level for a larger pharma name such as Sanofi (SNY) or Pfizer (PFE). EPS growth rate is near the top of bigpharma. We expect the shares to trade up near $27.
We expect earnings growth to remain very strong through 2011 from a combination of mid-to-high single digit sales growth and operating margin improvement. The results should be operating margins 500 basis points wider in 2011 relative to 2008. We currently model EPS to grow 14% from 2008 through 2011.
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