Bristol-Myers Squibb
BMY
$62.09
+0.94%
Bristol-Myers Squibb is a global biopharmaceutical company that discovers, develops, and markets innovative medicines primarily in oncology, cardiovascular, and immunology. As a leader in immuno-oncology, the company's key products include Opdivo and Yervoy, and it derives nearly 70% of its revenue from the U.S. market. The current investor narrative centers on the company's successful pivot to a new growth portfolio, evidenced by a strong Q1 2026 earnings beat and a 12% surge in newer drug sales, which has driven the stock to near its 52-week high. However, concerns persist over upcoming patent expirations on top-selling drugs and the sustainability of its dividend, creating a debate between value and risk.…
BMY
Bristol-Myers Squibb
$62.09
Related headlines
Investment Opinion: Should I buy BMY Today?
Rating: Hold. Bristol-Myers Squibb is a defensive value play with a compelling forward P/E of 10.02x and a 4.58% dividend yield, but the patent cliff and modest growth warrant a cautious stance. The analyst consensus is 'Buy' with an average target of $62.96, implying only 1.4% upside from the current price of $62.09, suggesting limited near-term appreciation.
Supporting Evidence: The forward P/E of 10.02x is a 54% discount to the industry average of 22x, indicating undervaluation. Revenue grew 2.57% year-over-year in Q1 2026, and net margin expanded to 23.3% from 8.7% in Q4 2025, showing operational improvement. Free cash flow of $11.9 billion provides strong cash generation, and the stock has outperformed the S&P 500 by 10.4 percentage points over the past year. However, the trailing P/E of 15.59x is near the lower end of its five-year range, reflecting market skepticism.
Risks & Conditions: The biggest risks are patent expirations on key drugs, high debt levels, and dividend sustainability. This Hold rating would upgrade to Buy if the forward P/E compresses below 8x or if new product revenue growth accelerates above 15% for two consecutive quarters. It would downgrade to Sell if revenue growth turns negative or the dividend is cut. Overall, BMY appears undervalued relative to peers and its own history, but the value is contingent on successful execution of the growth portfolio pivot.
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BMY 12-Month Price Forecast
BMY presents a balanced risk/reward profile over the next 12 months. The deep valuation discount and strong cash flows provide a margin of safety, but the modest revenue growth and patent cliff risks cap upside potential. The base case of trading near the average target of $62.96 is most likely, offering minimal returns. A bullish stance would require evidence of accelerating new drug growth, while a bearish stance would be triggered by a dividend cut or significant revenue decline. The neutral stance reflects the tension between value and risk, with the outcome hinging on execution of the growth portfolio pivot.
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 $62.96 and implied upside of +1.4% versus the current price.
Average Target
$62.96
0 analysts
Implied Upside
+1.4%
vs. current price
Analyst Count
—
covering this stock
Price Range
$40 - $75
Analyst target range
BMY is covered by 24 analysts, with a consensus recommendation of 'Buy' (mean rating 2.5 on a 1-5 scale, where 1 is Strong Buy). The average target price is $62.96, implying a modest 1.4% upside from the current price of $62.09. The distribution shows a bullish lean, with recent ratings from B of A Securities (Buy), Guggenheim (Buy), and Piper Sandler (Overweight), while Cantor Fitzgerald and Citigroup maintain Neutral/Equal Weight. The target price range spans from a low of $40.00 to a high of $75.00. The high target of $75 assumes successful pipeline execution and margin expansion, while the low target of $40 reflects concerns over patent expirations and competitive pressures. The wide spread of $35 (47% of the average target) indicates high uncertainty among analysts. Recent ratings have been stable, with no major upgrades or downgrades in the past six months, suggesting that the consensus view is relatively entrenched. The implied upside to the average target is minimal, but the bullish consensus and low valuation suggest that the stock may have more room to run if the company delivers on its growth strategy.
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Bulls vs Bears: BMY Investment Factors
Bristol-Myers Squibb presents a classic value-versus-risk debate. On the bull side, the company boasts a compelling forward P/E of 10.02x, a 54% discount to the industry average, robust free cash flow of $11.9 billion, and strong recent momentum with a 26.87% annual gain. The Q1 2026 earnings beat and 12% growth in newer drugs suggest the pivot to a growth portfolio is gaining traction. However, bears point to the looming patent expirations on Eliquis and Opdivo, which together account for over half of revenue, a high debt-to-equity ratio of 2.55, and a dividend payout ratio of 71.5% that may be unsustainable. The single most important tension is whether the growth from new products can offset the revenue losses from patent expirations. If the new portfolio sustains momentum, the stock could re-rate higher; if not, the low valuation may be a value trap. Currently, the bull case has stronger evidence given the valuation discount and cash flow strength, but the patent cliff remains a critical risk to monitor.
Bullish
- Strong Q1 2026 Earnings Beat: Bristol-Myers Squibb reported Q1 2026 net income of $2.678 billion, a significant improvement from $1.086 billion in Q4 2025, with net margin expanding to 23.3% from 8.7%. This earnings beat, driven by a 12% jump in newer drug sales, signals a successful pivot to growth portfolio.
- Attractive Forward Valuation: With a forward P/E of 10.02x, BMY trades at a 54% discount to the industry average of 22x. This low multiple provides a margin of safety and suggests the market is pricing in conservative expectations, leaving room for upside if growth materializes.
- Robust Free Cash Flow Generation: Trailing twelve-month free cash flow stands at $11.908 billion, providing ample coverage for dividends and debt service. This strong cash generation supports the 4.58% dividend yield and financial flexibility for investments or acquisitions.
- Strong Momentum and Technical Uptrend: The stock is up 26.87% over the past year, significantly outperforming the S&P 500's 16.47% gain. With a beta of 0.235, BMY offers defensive characteristics while still capturing upside, and the recent 12.89% one-month gain indicates accelerating momentum.
Bearish
- Patent Expirations on Key Drugs: BMY faces looming patent expirations on top-selling drugs like Eliquis ($4.137 billion quarterly revenue) and Opdivo ($2.146 billion). Loss of exclusivity could lead to significant revenue erosion, threatening the company's growth trajectory and dividend sustainability.
- High Debt-to-Equity Ratio: The debt-to-equity ratio of 2.55 is elevated, indicating substantial leverage. While manageable given cash flows, this debt burden could become problematic if patent expirations pressure earnings and cash generation.
- Modest Revenue Growth Plateau: Revenue has fluctuated between $11.2 billion and $12.5 billion over the past five quarters, with Q1 2026 revenue of $11.489 billion growing only 2.57% year-over-year. This plateau suggests limited top-line momentum despite the growth portfolio pivot.
- Dividend Sustainability Concerns: With a payout ratio of 71.5% and upcoming patent cliffs, the 4.58% dividend yield may be at risk. The Motley Fool has flagged that the dividend is under threat, which could deter income-focused investors and pressure the stock.
BMY Technical Analysis
BMY is in a sustained uptrend, with the stock price up 26.87% over the past year, significantly outperforming the S&P 500's 16.47% gain. The current price of $62.09 sits at 98.7% of its 52-week range (high $62.89, low $42.52), indicating strong momentum and positioning near the top of the range, which typically reflects bullish sentiment but also potential overextension. The stock's beta of 0.235 suggests it is much less volatile than the market, making it a defensive holding. Short-term momentum is accelerating, with a 1-month price change of +12.89% and a 3-month change of +5.76%, both outpacing the S&P 500's respective gains of 0.78% and 3.50%. The 1-month relative strength of 12.11% confirms strong recent outperformance. This divergence from the longer-term trend is positive, suggesting the uptrend is gaining strength rather than fading. Key support lies at the 52-week low of $42.52, while resistance is at the 52-week high of $62.89. A breakout above $62.89 would signal a continuation of the uptrend and could open the door to further gains. Conversely, a breakdown below recent support near $55 (the June 2026 low) would indicate a potential trend reversal. With a beta of 0.235, BMY is significantly less volatile than the market, meaning it tends to decline less during market downturns but also may lag during sharp rallies.
Beta
0.23
0.23x market volatility
Max Drawdown
-13.4%
Largest decline past year
52-Week Range
$43-$63
Price range past year
Annual Return
+26.9%
Cumulative gain past year
| Period | BMY Return | S&P 500 |
|---|---|---|
| 1m | +12.9% | +1.4% |
| 3m | +5.8% | +3.3% |
| 6m | +13.6% | +6.3% |
| 1y | +26.9% | +16.0% |
| ytd | +16.1% | +8.4% |
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BMY Fundamental Analysis
Revenue growth is modest but stable, with Q1 2026 revenue of $11.489 billion, up 2.57% year-over-year. The multi-quarter trend shows revenue fluctuating between $11.2 billion and $12.5 billion over the past five quarters, indicating a plateau rather than acceleration. Key growth drivers include Eliquis ($4.137 billion), Opdivo ($2.146 billion), and Breyanzi ($411 million), while legacy drugs like Revlimid ($349 million) are declining. The company is profitable, with Q1 2026 net income of $2.678 billion and a net margin of 23.3%, a significant improvement from the 8.7% margin in Q4 2025. Gross margin expanded to 70.2% in Q1 2026 from 67.2% in Q4 2025, reflecting a favorable product mix and cost controls. Operating margin also improved to 28.5% from 11.4% in the prior quarter, indicating strong operational efficiency. The balance sheet shows a debt-to-equity ratio of 2.55, which is elevated but manageable given the company's cash generation. Free cash flow for the trailing twelve months is $11.908 billion, providing ample coverage for dividends and debt service. The current ratio of 1.26 suggests adequate liquidity, and ROE of 38.2% is robust, reflecting efficient use of equity capital. However, the high debt level warrants monitoring, especially as patent expirations could pressure cash flows.
Quarterly Revenue
$11.5B
2026-03
Revenue YoY Growth
+2.6%
YoY Comparison
Gross Margin
70.2%
Latest Quarter
Free Cash Flow
$11.9B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is BMY Overvalued?
Since net income is positive, the primary valuation metric is the P/E ratio. The trailing P/E is 15.59x, while the forward P/E is 10.02x, implying that the market expects earnings to grow significantly in the coming year. The gap between trailing and forward P/E suggests that the market is pricing in a sharp earnings recovery, likely driven by cost savings and new product launches. Compared to the industry average (Drug Manufacturers - General) P/E of approximately 22x, BMY's trailing P/E of 15.59x represents a 29% discount, while the forward P/E of 10.02x is a 54% discount. This discount is justified by the company's modest revenue growth and patent cliff risks, but it also suggests that the stock is undervalued relative to peers if the growth portfolio can sustain momentum. Historically, BMY's trailing P/E has ranged from about 11x to 30x over the past five years. The current 15.59x is near the lower end of that range, indicating that the stock is trading at a historically cheap valuation. This could reflect the market's skepticism about future growth or present a value opportunity if the company can execute on its pipeline and margin expansion plans.
PE
15.6x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 10x~36x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
10.1x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: BMY's elevated debt-to-equity ratio of 2.55 is a primary financial risk, as it increases interest expense and limits financial flexibility. While trailing free cash flow of $11.9 billion provides coverage, any sustained earnings decline from patent expirations could strain debt servicing. The payout ratio of 71.5% leaves little room for dividend cuts if cash flows weaken, and the modest 2.57% revenue growth rate indicates limited top-line momentum to absorb shocks. Additionally, the net margin of 23.3% in Q1 2026, while improved, may not be sustainable if competitive pressures force higher R&D or marketing spending.
Market & Competitive Risks: The stock's low beta of 0.235 suggests it is less correlated with the market, but this also means it may lag during broad rallies. Valuation compression is a risk if the market re-rates the sector lower; however, the forward P/E of 10.02x is already at a deep discount, limiting downside from multiple contraction. Competitive threats are real, as evidenced by Takeda's superior psoriasis drug trial results, which could pressure BMY's immunology franchise. Regulatory risks include potential drug pricing reforms or tariffs, as highlighted by the 100% drug tariff news, which could impact BMY's U.S.-centric revenue (70% from U.S.).
Worst-Case Scenario: In a severe scenario, patent expirations on Eliquis and Opdivo lead to rapid revenue decline, forcing the company to cut its dividend to preserve cash. Earnings could fall sharply, causing the stock to re-test its 52-week low of $42.52. From the current price of $62.09, this represents a potential loss of 31.5%. The analyst low target of $40.00 implies an even deeper 35.6% downside. Such a scenario would likely be triggered by a combination of failed pipeline drugs, aggressive generic competition, and a broader market downturn.
FAQ
The key risks are financial, competitive, and company-specific. Financially, the debt-to-equity ratio of 2.55 is elevated, and the payout ratio of 71.5% leaves little room for dividend cuts if cash flows decline. Competitively, Takeda's superior psoriasis drug trial results highlight the threat to BMY's immunology franchise, and generic competition for Eliquis and Opdivo could erode revenue. Company-specific risks include the patent cliff on top-selling drugs, which together account for over half of revenue, and the modest 2.57% revenue growth rate that may not sustain the dividend. The most severe risk is a dividend cut, which could trigger a sell-off to the 52-week low of $42.52.
The 12-month forecast for BMY is mixed, with three scenarios: a bull case (25% probability) targeting $65-$75, driven by accelerating new drug growth and multiple expansion; a base case (50% probability) targeting $58-$65, with steady but unspectacular results and the stock near the analyst average of $62.96; and a bear case (25% probability) targeting $40-$52, driven by patent expirations and a potential dividend cut. The base case is most likely, implying limited upside from the current price of $62.09. The key assumption is that new product growth will partially offset patent losses, keeping revenue stable. Investors should monitor quarterly earnings for signs of which scenario is unfolding.
BMY appears undervalued relative to both its peers and its own history. The trailing P/E of 15.59x is near the lower end of its five-year range of 11x-30x, and the forward P/E of 10.02x represents a 54% discount to the industry average of 22x. The price-to-sales ratio of 2.28x is also below the sector median. This low valuation reflects market skepticism about future growth due to patent expirations. However, if the company can successfully pivot to new growth products, the current valuation offers a significant margin of safety. The market is pricing in conservative expectations, implying that BMY is undervalued if execution improves, but fairly valued if patent losses materialize as feared.
BMY is a good buy for value-oriented investors seeking a high dividend yield and defensive characteristics, but it carries significant risk from patent expirations. The stock trades at a forward P/E of 10.02x, a 54% discount to the industry average, and offers a 4.58% dividend yield. The analyst consensus is 'Buy' with an average target of $62.96, implying only 1.4% upside, but the high target of $75 suggests potential for 20.8% gains if the growth portfolio succeeds. However, the biggest downside risk is a dividend cut or revenue decline from patent losses, which could send the stock to the 52-week low of $42.52 (31.5% downside). For investors with a long-term horizon and tolerance for near-term volatility, BMY offers a compelling risk/reward; for those seeking growth or capital appreciation, other options may be more suitable.
BMY is more suitable for long-term investment due to its defensive characteristics and high dividend yield, but it also offers short-term trading opportunities given its recent momentum. With a beta of 0.235, the stock is less volatile than the market, making it a stable long-term hold for income-focused investors. The 4.58% dividend yield provides a steady income stream, but the payout ratio of 71.5% and patent cliff risks mean the dividend may not be sustainable over the very long term. For short-term traders, the stock's 12.89% one-month gain and proximity to the 52-week high offer potential for momentum plays, but the low beta limits upside. A suggested minimum holding period is 3-5 years to allow the growth portfolio to mature and patent risks to resolve.
