Bristol-Myers Squibb
BMY
$59.70
+0.18%
Bristol-Myers Squibb Co. is a global biopharmaceutical company that discovers, develops, and commercializes medicines across oncology, cardiovascular, immunology, and neuroscience therapeutic areas, with a portfolio anchored by blockbuster franchises such as Eliquis, Opdivo, and Revlimid. The company is a leader in immuno-oncology and derives close to 70% of total sales from the US market, giving it a higher domestic revenue concentration than most large-cap pharmaceutical peers. The current investor narrative centers on whether BMY's growth portfolio — including Camzyos, Reblozyl, Breyanzi, and Cobenfy — can offset the looming patent cliff for Revlimid and Eliquis, a debate sharpened by recent headlines highlighting the company's discounted valuation and well-funded dividend. Wall Street's bull case has been getting louder, with analysts pointing to robust growth-brand momentum and a deep pipeline as reasons the market may be underappreciating the company's earnings durability.…
BMY
Bristol-Myers Squibb
$59.70
Related headlines
Investment Opinion: Should I buy BMY Today?
We rate BMY a Buy, anchored by its compelling valuation and income appeal. The stock trades at a forward PE of 9.31x, a steep discount to large-cap pharma peers, while offering a 4.58% dividend yield. The analyst consensus is 'buy' with an average target of $66.71, implying 9.1% upside, and the company generates $11.44 billion in trailing free cash flow, comfortably covering its dividend. The core thesis is that the market is overly pessimistic about the patent cliff, underestimating the growth potential of new products like Camzyos, Breyanzi, and Cobenfy.
Supporting evidence includes: 1) Revenue growth of 5.74% year-over-year in Q2 2026, with sequential acceleration from Q1; 2) Net margin of 25.57% and operating margin of 31.50% in Q2 2026, showing strong profitability; 3) Free cash flow yield of roughly 10.4% on the market cap, providing ample coverage for the dividend and reinvestment; 4) The forward PE of 9.31x is well below the sector average of 18-22x, and the 2.28x PS ratio is near historic lows. These metrics suggest the stock is undervalued relative to its earnings power and cash generation.
Key risks that could invalidate the thesis include: 1) Faster-than-expected generic erosion of Eliquis and Revlimid; 2) Disappointing sales from growth brands, particularly Camzyos facing competition from Cytokinetics' aficamten; 3) High leverage (debt-to-equity of 2.55) limiting financial flexibility. The rating would upgrade to a Strong Buy if forward PE compresses below 8x or if growth brands show accelerating adoption. It would downgrade to Hold if revenue growth decelerates below 3% or if dividend coverage falls below 1.5x. Relative to its history and peers, BMY appears undervalued, trading at a discount to its own historical PE band and the broader pharma sector.
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BMY 12-Month Price Forecast
BMY presents a compelling value opportunity with a forward PE of 9.31x, a 4.58% dividend yield, and robust free cash flow of $11.44 billion. The growth portfolio is gaining traction, with products like Camzyos and Breyanzi showing strong uptake, which should offset the patent cliff over time. Analyst sentiment is moderately bullish, with a consensus buy rating and a $66.71 average target, though the wide target range reflects uncertainty. The low beta of 0.227 makes it a defensive holding, but also means it may lag in strong bull markets. We would upgrade to high confidence if revenue growth accelerates above 7% or if the forward PE remains below 10x while earnings estimates rise. We would downgrade if Eliquis erosion accelerates or if dividend coverage falls below 1.2x.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Bristol-Myers Squibb's 12-month outlook, with a consensus price target around $66.17 and implied upside of +10.8% versus the current price.
Average Target
$66.17
0 analysts
Implied Upside
+10.8%
vs. current price
Analyst Count
—
covering this stock
Price Range
$41 - $82
Analyst target range
BMY is covered by 24 analysts with a consensus recommendation of "buy" (recommendation mean of 2.46 on a 1-5 scale where lower is more bullish), and the average target price of $66.71 implies roughly 9.1% upside from the current price of $61.15. The distribution of recent institutional ratings skews constructive, with Piper Sandler maintaining Overweight, Argus Research upgrading to Buy from Hold in August 2026, and Guggenheim, Truist, and JP Morgan all reiterating Buy or Overweight ratings, while HSBC, Citigroup, Wells Fargo, RBC, and Cantor Fitzgerald remain neutral or equal weight. The consensus leans moderately bullish, but the presence of five neutral ratings among the ten most recent actions suggests the Street is not uniformly convinced that the growth story fully offsets the patent cliff. The target range spans from a low of $40.00 to a high of $82.00, a spread of 105% of the current price that signals unusually high uncertainty about the company's trajectory. The high target of $82.00 implies roughly 34% upside and would require both multiple expansion toward 16x forward earnings and successful execution on the growth portfolio, particularly Camzyos, Breyanzi, and Cobenfy scaling faster than consensus expects. The low target of $40.00, roughly 35% below the current price, prices in a scenario of accelerating generic erosion, Medicare price negotiation pressure on Eliquis and Opdivo, and margin compression that overwhelms the growth brands. The wide spread, combined with the low beta of 0.227 and the 5.36 short ratio, suggests the stock is a low-volatility, income-oriented holding where the primary risk is fundamental (patent cliff) rather than market-driven, and where the dividend yield of 4.58% provides a floor that limits downside for long-term holders.
Bulls vs Bears: BMY Investment Factors
The bull case for BMY rests on its deeply discounted valuation, robust free cash flow, and a growing portfolio of new drugs that are gradually offsetting the patent cliff. The bear case centers on the looming loss of exclusivity for Eliquis and Revlimid, high leverage, and recent momentum deterioration. Currently, the bull evidence appears stronger: the stock trades at a forward PE of just 9.31x, offers a 4.58% dividend yield, and has 24 analysts with a consensus buy rating and a $66.71 average target. However, the single most important tension is whether the growth portfolio—particularly Camzyos, Breyanzi, and Cobenfy—can scale fast enough to replace the roughly $4.9 billion in combined Eliquis and Revlimid revenue at risk. If these new drugs deliver, the stock could re-rate significantly; if they falter, the bear case of multiple compression and dividend strain becomes dominant.
Bullish
- Deep Value Valuation: BMY trades at a trailing PE of 15.59x and a forward PE of just 9.31x, a steep discount to large-cap pharma peers that typically command 18-22x earnings. The 2.28x PS ratio is well below the 7.5x-13.8x range seen from 2021 through 2025, suggesting the stock is near the bottom of its own historical valuation band.
- Robust Free Cash Flow and Dividend: Trailing-twelve-month free cash flow stands at $11.44 billion, comfortably covering the $1.287 billion quarterly dividend (payout ratio of 71.52%). The 4.58% dividend yield is roughly double the sector average, providing a meaningful income cushion and limiting downside.
- Growth Portfolio Scaling: New products are gaining traction: Eliquis at $4.481 billion, Opdivo at $2.485 billion, Reblozyl at $735 million, Camzyos at $416 million, and Breyanzi at $484 million. These brands are progressively offsetting the decline in Revlimid, which has shrunk to just $425 million.
- Analyst Consensus Buy Rating: 24 analysts rate BMY a 'buy' with a recommendation mean of 2.46, and the average target price of $66.71 implies 9.1% upside from the current price of $61.15. Recent upgrades, including Argus Research moving to Buy from Hold in August 2026, signal improving sentiment.
Bearish
- Patent Cliff Overhang: Eliquis and Revlimid together generate roughly $4.9 billion in quarterly revenue and face eventual generic competition and Medicare price negotiation pressure. Revlimid has already shrunk to $425 million, and Eliquis remains a major target for Medicare negotiation, threatening a significant revenue base.
- High Leverage and Payout Strain: The debt-to-equity ratio of 2.55 and total debt to capitalization of 65.89% reflect an aggressive debt-funded acquisition history. The dividend payout ratio of 71.52% leaves limited room for error if earnings decline, and interest coverage of 10.04x, while adequate, could tighten under stress.
- Recent Momentum Deterioration: The stock is down 9.62% over the past month versus a 0.59% gain for SPY, producing a relative strength of -10.21%. Over six months, BMY has gained only 2.60% while SPY rose 17.35%, a relative underperformance of 14.75%, indicating fading leadership.
- Wide Analyst Target Dispersion: The analyst target range spans from $40.00 to $82.00, a 105% spread around the current price, signaling unusually high uncertainty. The low target of $40.00 implies 35% downside and prices in accelerating generic erosion and margin compression.
BMY Technical Analysis
BMY is in a sustained recovery uptrend, with the stock up 33.72% over the past year and 14.38% year-to-date, though it has pulled back from its 52-week high of $68.64 to a current price of $61.15. That places the stock at roughly 71.4% of its 52-week range (calculated as ($61.15 - $42.52) / ($68.64 - $42.52)), indicating it retains a constructive intermediate-term posture but has surrendered meaningful ground from the highs. The 52-week low of $42.52 underscores how powerful the recovery has been, and the fact that the stock is still trading well above that level suggests buyers remain in control of the longer-term trend despite recent softness. Recent momentum has deteriorated sharply, with the stock down 9.62% over the past month versus a 0.59% gain for SPY, producing a relative strength of -10.21% and a clear divergence from the positive 1-year trend. Over the past three months, however, BMY is still up 5.20% and has outperformed SPY by 1.86%, suggesting the one-month weakness is a pullback within a broader uptrend rather than a full trend reversal. The 6-month change of 2.60% trails SPY's 17.35% by a wide margin (relative strength of -14.75%), indicating that the stock's leadership has faded since the spring and that momentum traders have rotated elsewhere. Key technical support sits near the 52-week low at $42.52, with intermediate support likely around the $54-$55 area where the stock consolidated in June 2026, while resistance is defined by the 52-week high of $68.64. A breakout above $68.64 would signal renewed institutional accumulation and likely open the door to a re-rating, whereas a breakdown below $54 would threaten the recovery structure and put the $42.52 low back in play. With a beta of just 0.227, BMY is roughly 77% less volatile than the broader market, meaning position sizing can be larger for the same dollar risk, but it also implies the stock may lag sharply in strong risk-on rallies.
Beta
0.18
0.18x market volatility
Max Drawdown
-13.6%
Largest decline past year
52-Week Range
$43-$69
Price range past year
Annual Return
+33.7%
Cumulative gain past year
| Period | BMY Return | S&P 500 |
|---|---|---|
| 1m | -10.7% | +0.9% |
| 3m | +3.0% | +3.4% |
| 6m | +1.8% | +14.4% |
| 1y | +33.7% | +16.2% |
| ytd | +11.7% | +14.0% |
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BMY Fundamental Analysis
BMY's revenue trajectory is modestly growing, with Q2 2026 revenue of $12.973 billion representing 5.74% year-over-year growth versus Q2 2025's $12.269 billion, and the sequential trend from Q1 2026's $11.489 billion shows acceleration into the middle of the year. The growth is being driven by the new-product portfolio — Eliquis at $4.481 billion, Opdivo at $2.485 billion, Orencia at $1.034 billion, and Reblozyl at $735 million — while legacy Revlimid has shrunk to just $425 million, confirming that the patent-cliff drag is being progressively offset by newer brands. The key question for the investment case is whether Camzyos ($416 million), Breyanzi ($484 million), and Cobenfy ($63 million) can scale fast enough to replace the roughly $4.9 billion in combined Eliquis and Revlimid revenue that faces eventual generic and Medicare negotiation pressure. Profitability is robust, with Q2 2026 net income of $3.317 billion on a 25.57% net margin and a gross margin of 71.28%, up from 72.52% in Q2 2025 but well above the 60.15% gross margin recorded in Q4 2024. Operating margin stands at 28.48% on a trailing basis and 31.50% in Q2 2026, and the sequential improvement in net income from $1.087 billion in Q4 2025 to $2.677 billion in Q1 2026 and $3.317 billion in Q2 2026 reflects both operating leverage and the absence of the large one-time charges that depressed late-2025 results. The balance sheet carries meaningful leverage, with a debt-to-equity ratio of 2.55 and total debt to capitalization of 65.89%, but interest coverage of 10.04x and a current ratio of 1.26 provide adequate cushion. Free cash flow remains the standout, with $11.44 billion in trailing-twelve-month FCF and $3.088 billion generated in Q2 2026 alone, comfortably covering the $1.287 billion quarterly dividend (payout ratio of 71.52%) and the $305 million in capital expenditures. The FCF yield of roughly 10.4% on the $110.1 billion market cap and ROE of 38.19% indicate the company generates substantial cash returns on equity despite its leveraged capital structure, reducing dependence on external financing.
Quarterly Revenue
$13.0B
2026-06
Revenue YoY Growth
+5.7%
YoY Comparison
Gross Margin
71.3%
Latest Quarter
Free Cash Flow
$11.4B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is BMY Overvalued?
Because BMY is solidly profitable — Q2 2026 net income of $3.317 billion and trailing EPS of $0.064 — the PE ratio is the appropriate primary metric, and the trailing PE of 15.59x versus a forward PE of just 9.31x implies the market expects earnings to grow substantially, with the forward multiple reflecting consensus EPS of $5.00 against the current price of $61.15. The wide gap between trailing and forward PE (a 40% compression) signals that analysts anticipate a significant earnings rebound, likely driven by growth-brand scaling and the lapping of prior-year charges, though it also means the stock is priced for execution that has yet to be delivered. Relative to the drug manufacturing sector, BMY's 15.59x trailing PE and 2.28x PS ratio screen as a discount to the broader large-cap pharma group, where peers often trade at 18-22x earnings; the 9.65x EV/EBITDA and 3.24x EV/Sales further reinforce the value orientation. The 5.96x price-to-book ratio is elevated versus the sector, but that reflects the company's aggressive debt-funded acquisition history rather than a growth premium, and the 4.58% dividend yield is roughly double the sector average, providing a meaningful income cushion. Historically, BMY's PE has ranged from a low of 8.89x in Q2 2026 to a high of 398x in Q4 2024 (distorted by near-zero earnings), with the more normal range over the past three years sitting between 10x and 30x. The current 15.59x trailing PE sits in the lower-middle of that band, while the 2.28x PS ratio is well below the 7.5x-13.8x range seen from 2021 through 2025, suggesting the stock is near the bottom of its own historical valuation band. That positioning implies the market is pricing in patent-cliff risk and execution uncertainty rather than optimism, which creates potential for multiple expansion if growth-brand momentum continues to surprise to the upside.
PE
15.6x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 9x~30x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
9.7x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are significant. BMY carries a debt-to-equity ratio of 2.55 and total debt to capitalization of 65.89%, reflecting its debt-funded acquisition strategy. The dividend payout ratio of 71.52% leaves limited flexibility if earnings decline, and while interest coverage of 10.04x is currently adequate, a downturn in cash flow could pressure the company's ability to maintain both its dividend and debt obligations. Additionally, revenue concentration in the US (close to 70% of sales) exposes BMY to US-specific pricing pressures, including Medicare negotiation, which could disproportionately impact its top line.
Market and competitive risks are also material. The stock's beta of 0.227 indicates low correlation with the broader market, but this also means it may lag in strong risk-on rallies. The recent 9.62% one-month decline versus a 0.59% gain for SPY highlights vulnerability to sector rotation, as investors may favor higher-growth biotech names. Competitive threats are intensifying: Cytokinetics' aficamten (Myqorzo) is poised to capture significant HCM market share, directly challenging BMY's Camzyos. Furthermore, the wide analyst target range ($40-$82) underscores uncertainty about the company's ability to navigate the patent cliff and execute on its pipeline.
The worst-case scenario involves a combination of accelerating generic erosion of Eliquis and Revlimid, Medicare price negotiation reducing revenue, and disappointing sales from growth brands like Camzyos and Cobenfy. In this scenario, the stock could retest its 52-week low of $42.52, representing a 30.5% decline from the current price of $61.15. The analyst low target of $40.00 implies a 34.6% downside. Such a scenario would likely be accompanied by multiple compression, as the forward PE of 9.31x could contract further if earnings estimates are revised downward. Investors could lose roughly 30-35% from current levels in this adverse case.
FAQ
The key risks include: 1) Patent cliff: Eliquis and Revlimid face generic competition and Medicare negotiation, threatening roughly $4.9 billion in combined quarterly revenue. 2) High leverage: Debt-to-equity of 2.55 and total debt to capitalization of 65.89% limit financial flexibility. 3) Competitive threats: Cytokinetics' aficamten could erode Camzyos sales in HCM. 4) Execution risk: Growth brands like Cobenfy ($63 million) are still small and must scale rapidly to offset declines. These risks are ranked from most severe (patent cliff) to least (execution risk), but all could negatively impact the stock.
Our 12-month forecast has three scenarios: Bull case (25% probability) targets $75-$82, driven by successful pipeline execution and multiple expansion. Base case (55% probability) targets $65-$70, assuming mid-single-digit revenue growth and stable margins. Bear case (20% probability) targets $40-$50, if patent erosion accelerates and growth brands disappoint. The base case is most likely, hinging on BMY achieving consensus EPS of $5.00 and maintaining its dividend. The analyst average target of $66.71 aligns with our base case.
BMY appears undervalued. Its trailing PE of 15.59x and forward PE of 9.31x are well below the large-cap pharma average of 18-22x. The PS ratio of 2.28x is near historic lows, compared to a range of 7.5x-13.8x from 2021 to 2025. The EV/EBITDA of 9.65x also screens cheap. The market is pricing in significant patent cliff risk and execution uncertainty, but if BMY can deliver on its growth portfolio, multiple expansion could drive the stock higher. The 4.58% dividend yield further supports the undervaluation thesis.
From a risk/reward perspective, BMY offers a favorable setup for value-oriented investors. The stock trades at a forward PE of 9.31x, a significant discount to peers, and offers a 4.58% dividend yield. Analyst consensus is 'buy' with an average target of $66.71, implying 9.1% upside. However, the biggest downside risk is the patent cliff, with Eliquis and Revlimid facing generic competition and Medicare negotiation, which could drive the stock to the analyst low target of $40 (35% downside). For income-focused investors with a long-term horizon, BMY is a good buy at current levels, but those seeking high growth may find better opportunities elsewhere.
BMY is best suited for long-term investment, given its low beta (0.227), stable dividend (4.58% yield), and defensive characteristics. The stock is not a high-growth momentum play; its value proposition unfolds over years as the growth portfolio matures and the patent cliff is managed. Short-term trading is less attractive due to low volatility and recent momentum weakness (-9.62% in one month). A minimum holding period of 2-3 years is recommended to capture the dividend and potential multiple expansion, while allowing time for pipeline catalysts to materialize.