Bristol Myers Squibb stock (NYSE: BMY) has gained 7% this 12 months, outperforming the S&P 500 which has declined 1%. BMS’s robust This autumn efficiency has helped drive its constructive momentum. Whereas markets broadly face stress from new U.S. tariffs on Canada, Mexico, and China, traders are in search of defensive positions amid financial uncertainty. Our tackle market crash risk right now has extra particulars on how tariffs influence the broader markets.
Regardless of this current energy, BMY inventory stays down 8% when seen over an extended timeframe from early 2023. This could primarily be attributed to:
- a 5% rise within the firm’s income from $46.2 billion in 2022 to $48.3 billion now;
- a 6% fall in complete shares excellent to 2.0 billion; greater than offset by:
- a 17% fall in P/S ratio to 2.5x now, versus 3.0x in 2022
We talk about these components within the sections beneath. Whereas BMY inventory has had a poor run, in order for you an upside with a smoother experience than a person inventory, contemplate the High-Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception.
Picture by Damian Kaffenberger from Pixabay
Bridging the Hole: From Revlimid to Camzyos
Bristol Myers Squibb’s income faces challenges because of declining gross sales of legacy medication like Revlimid. Nonetheless, the robust efficiency of Eliquis, with over $13 billion in gross sales final 12 months, offers a counterweight. Whereas Eliquis gross sales are projected to develop within the close to time period, biosimilar competitors looms, with its market exclusivity interval ending in 2028. BMS anticipates its new cardiovascular drug, Camzyos, will offset the eventual Eliquis decline. Moreover, BMS expects newer medication, together with Sotyktu, and Opdualag, to every exceed $1 billion in gross sales by 2026. To additional enhance development, BMS has pursued strategic acquisitions, buying Mirati Therapeutics, RayzeBio, and Karuna Therapeutics. These acquisitions have expanded BMS’s pipeline to over 50 compounds, together with the just lately FDA-approved schizophrenia drug, Cobenfy, which has a possible peak gross sales estimate of over $7 billion.
Current Share Buyback Pattern
Since 2022, Bristol Myers Squibb has lowered its excellent shares from 2.15 billion to 2.03 billion by means of $13 billion in share repurchases. Whereas the corporate nonetheless has $5 billion approved for buybacks as of December 31, 2024, no repurchases had been made throughout 2024.
Valuation Pressures Amidst Income Transition
BMS is experiencing a interval of valuation stress regardless of elevated revenues. This stems from a confluence of things, primarily the declining gross sales of established blockbuster medication and the anticipation of forthcoming generic competitors for Eliquis. Whereas the corporate’s new drug portfolio demonstrates promising development, BMS itself forecasts a 6% income decline for the present 12 months. Moreover, we anticipate this downward pattern to persist into 2026. Consequently, traders have assigned a decrease valuation a number of to the inventory.
Presently, at roughly $60 per share, BMS inventory trades at 2.5 instances its trailing revenues, barely beneath its five-year common price-to-sales (P/S) ratio of two.6. Primarily based on our evaluation, we estimate Bristol Myers Squibb’s valuation to be round $61 per share, aligning carefully with the present market value.
Whereas new drug approvals supply potential upside, the instant monetary outlook is dominated by the income influence of declining legacy drug gross sales. This short-term problem seems to be overshadowing the long-term development prospects of the corporate’s rising pharmaceutical pipeline.
Whereas BMY inventory navigates decrease gross sales and valuation, uncover the potential of the Excessive-High quality Portfolio, a curated record of 30 shares that has persistently delivered superior returns in comparison with the S&P 500 over the previous 4 years.
| Returns | Mar 2025 MTD [1] |
2025 YTD [1] |
2017-25 Whole [2] |
| BMY Return | 0% | 7% | 35% |
| S&P 500 Return | -2% | -1% | 161% |
| Trefis Strengthened Worth Portfolio | -2% | -4% | 658% |
[1] Returns as of three/4/2025
[2] Cumulative complete returns because the finish of 2016
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The views and opinions expressed herein are the views and opinions of the writer and don’t essentially mirror these of Nasdaq, Inc.
