Why Bristol Myers Squibb Jumped Nearly 10% on Friday

Bristol Myers Squibb (NYSE: BMY) shareholders are certainly finishing the trading week on a high note. The drugmaker's stock is up 9.6% as of 1:14 p.m. ET, according to data from S&P Global Market Intelligence , in response to a surprisingly strong second-quarter report and subsequently raised full-year guidance.

Bristol Myers Squibb is firing on all cylinders

Give credit to Bristol Myers Squibb's newer drugs like Opdivo, Yervoy, and Opdualag. These cancer-fighting treatments led the company's so-called Growth Portfolio to total revenue of $5.6 billion, up 18% year over year. Meanwhile, its legacy portfolio -- largely made up of blood-thinning Eliquis and oncology drug Revlimid -- still managed to produce modest growth. All told, Q2's top line grew 9% year over year to $12.2 billion, beating estimates of only $11.5 billion. Per-share profits of $2.07 were up from the year-ago comparison of $1.75, also topping estimates of $1.63 per share.

This pace of forward progress isn't apt to slow in the foreseeable future, either. Bristol Myers Squibb upped its full-year revenue forecast slightly, in addition to raising its 2024 earnings guidance from a range of only $0.40-$0.70 per share to a new prediction of $0.60-$0.90 per share.

The pharmaceutical giant's bottom line is likely to be lifted by the U.S. launch of schizophrenia and neurodegenerative disease therapy KarXT later this year.

Don't be intimated -- look at the bigger picture

A big jump like this one is a tough act to follow, which is why many people simply don't buy stocks after such moves.

Bristol Myers Squibb, however, may be a worthy exception to this line of thinking. Even with Friday's sizable rally, shares are still 40% below their November 2022 high, nearer the multiyear low reached earlier this month.

What's the deal? Investors were largely fearing the worst for Eliquis and Revlimid before sales of the company's newer drugs reached their full stride. Now we can see these worries may have been overblown. The stock's still undervalued compared to the company's potential though. It's also an attractive dividend prospect, with its recent weakness pumping up the forward-looking dividend yield up to 5.3%.

That's based on a dividend, by the way, that's been raised every year for the past 15 years.

James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bristol Myers Squibb. The Motley Fool has a disclosure policy .