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Moody's revises outlook on Bristol-Myers to stable

Moody's affirmed Bristol-Myers Squibb Co.'s A2 senior unsecured rating as well as the Prime-1 commercial paper rating, and revised the rating outlook to stable from negative.

Michael Levesque, Moody's senior vice president, said the outlook revision reflects its expectations for solid growth in cancer drug Opdivo despite a competitive lung cancer market as well as improved financial flexibility resulting from the U.S. tax reform.

The A2 rating reflects the New York-based company's large scale and strong position in cancer treatment. Moody's said the company's financial leverage is low, with debt/EBITDA remaining below 2.0x absent large acquisitions.

Moody's noted that the company's cash levels are very high and likely to remain above $8 billion until the company refines its capital allocation plans after the U.S. tax reform.

The stable rating outlook takes into account Moody's expectations for solid earnings growth and continuation of conservative financial policies, tempered by limited diversification.