Bristol Myers Squibb Co. (BMY) | Company valuation, comparison, AI analysis | Thematic | AI powered fundamental research and development platform

Key takeaways

Bristol Myers Squibb appears moderately undervalued based on its low valuation multiples compared to industry averages, strong product portfolio, and significant growth prospects, particularly with Cobenfy. However, this is balanced against profitability concerns, high financial leverage, and industry pressures, which temper the degree of undervaluation.

BMY's revenue is growing, but net profit margins are low (0.58% in Q4 2024), indicating potential issues with expense management.
The debt-to-equity ratio is significantly higher than the industry average (313.44% vs. 132.02% in Q4 2024), posing solvency risks.
Liquidity is a concern, with current and quick ratios below industry averages (1.25 and 1.15 respectively in Q4 2024).
Management is optimistic about Cobenfy's potential, viewing it as a significant long-term growth driver, but its success is crucial for future revenue.
The company faces increased pricing pressures and market access challenges from government actions like the Inflation Reduction Act (IRA), impacting revenues and profitability.
BMY has outperformed peers like Merck (MRK) and GSK over the past year, but longer-term performance lags, and its maximum drawdown was a significant -47.67% on 07/03/2024.
The company is pursuing cost savings initiatives, targeting $1.5 billion in annual savings by 2025, with an additional $2 billion identified, which is critical for improving profitability.
BMY is entering a data-rich period with multiple catalysts over the next 24 months, making clinical trial outcomes key to future growth.
The Enterprise Value to EBITDA and Sales ratios are significantly lower than industry averages, suggesting potential undervaluation.
The company's 2025 revenue is estimated at $45.5 billion, with non-GAAP EPS projected between $6.55 and $6.85, reflecting the impact of generics and the strength of the growth portfolio.

Evaluation summary

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Company Overview:
- Bristol Myers Squibb Co. (BMY) is a global biopharmaceutical company engaged in discovering, developing, licensing, manufacturing, marketing, distributing, and selling biopharmaceutical products. The company offers small molecules, biologics, and CAR-T cell therapies.
- Key marketed products include Opdivo, Eliquis, Revlimid, Pomalyst, Sprycel, Orencia, Yervoy, Reblozyl, Opdualag, Abecma, Zeposia, Breyanzi, Camzyos, Sotyktu, Augtyro, Krazati, and Cobenfy. These products span therapeutic areas such as oncology, hematology, immunology, cardiovascular, and neuroscience.
- BMY operates in a single segment with a global research and development organization, supply chain, and regional commercial teams. Its key customers include wholesalers, distributors, pharmacies, and government agencies.
- The peer group for comparative analysis includes Merck & Co., Inc. (MRK) and GSK Plc (GSK), while the Health Care Select Sector SPDR Fund (XLV) is used as a benchmark.
Financial Performance:
- BMY's revenue has shown an upward trend in the most recent quarters, with sales of $12.342 billion for the quarter ending December 31, 2024, compared to $11.865 billion for the quarter ending March 31, 2024.
- Gross profit margin has increased from 55.54% in Q1 2024 to 60.15% in Q4 2024, suggesting improved cost management or pricing strategies.
- Net profit margin, however, remains low at 0.58% for Q4 2024, although it has improved from -100.39% in Q1 2024. This indicates potential issues with expense management or other factors affecting profitability.
- Return on Average Assets (ROA) and Return on Average Total Equity (ROE) are negative, with ROA at -9.53% and ROE at -39.10% for Q4 2024, suggesting inefficient asset utilization and poor returns to shareholders.
- EBITDA margin is 35.65% for Q4 2024, which is significantly lower than the industry average of -480807.47%.
- The SEC filings mention that revenues grew 7% year-to-date, driven by the Growth Portfolio and Eliquis, partially offset by declines in Revlimid and Sprycel.
- The earnings call highlighted that the growth portfolio delivered double-digit revenue growth, and the company reestablished its presence in neuroscience with the approval and launch of Cobenfy.
- Gross margins were impacted by higher profit sharing, royalties, and intangible asset impairments, according to the SEC filings.
Operational Efficiency:
- Total current assets decreased from $28.669 billion in Q1 2024 to $29.780 billion in Q4 2024. Total current liabilities decreased from $25.822 billion to $23.774 billion over the same period.
- Working capital increased from $2.847 billion in Q1 2024 to $6.006 billion in Q4 2024, indicating improved short-term financial health.
- Net operating cash flow increased significantly from $2.834 billion in Q1 2024 to $4.439 billion in Q4 2024.
- Free cash flow to equity also increased from $2.550 billion in Q1 2024 to $4.061 billion in Q4 2024.
- Total capital expenditure increased from $284 million in Q1 2024 to $378 million in Q4 2024. Depreciation, depletion, and amortization were $1.880 billion in Q4 2024.
- Cash dividends paid were $1.218 billion in Q4 2024.
- The current ratio improved from 1.11 in Q1 2024 to 1.25 in Q4 2024, but remains below the industry average of 6.91. The quick ratio also improved from 0.99 to 1.15, but is still below the industry average of 6.75.
- The debt-to-equity ratio decreased from 348.14% in Q1 2024 to 313.44% in Q4 2024, but remains significantly higher than the industry average of 132.02%.
- The SEC filings indicate that operating expenses increased due to the impact of recent acquisitions, including R&D, marketing, and integration costs.
Growth Opportunities:
- BMY is expanding its pipeline and capabilities through major acquisitions, including Karuna, RayzeBio, and Mirati, to expand in key therapeutic areas.
- The company entered a strategic collaboration with SystImmune for co-development and co-commercialization of a bispecific antibody-drug conjugate.
- Recent product approvals include Cobenfy for schizophrenia, Breyanzi for lymphoma, and expanded indications for Reblozyl, Opdivo, Krazati, and Augtyro.
- Management is optimistic about Cobenfy's potential and is investing heavily in its clinical development across multiple indications.
- The company is focused on improving R&D productivity and accelerating late-stage pipeline programs.
- Business development remains a top priority for capital allocation, with a focus on strengthening core therapeutic areas and acquiring assets that can improve the company's growth profile.
- The earnings call highlighted that the company is entering a data-rich period with multiple catalysts over the next 24 months across a significant number of assets.
- The SEC filings mention that revenues grew 7% year-to-date, driven by the Growth Portfolio and Eliquis.
Recent Developments and Market Sentiment:
- The earnings call highlighted management's optimism regarding Cobenfy's potential as a significant long-term growth driver.
- Analysts are focused on the ramp-up of Cobenfy, long-term cost opportunities, and the impact of Part D redesign.
- The company is aggressively pursuing cost savings initiatives to improve financial flexibility and profitability.
- The SEC filings mention increased pricing pressures and market access challenges from government actions and policies, which could significantly impact revenues and profitability.
- The company is facing generic and biosimilar competition eroding revenues for legacy products.
- The overall market sentiment appears cautiously optimistic, with analysts questioning the company's ability to manage declining legacy revenues and successfully launch new products.
Risks and Threats:
- Increased pricing pressures and market access challenges from government actions and policies, such as the Inflation Reduction Act (IRA), pose a significant risk.
- Generic and biosimilar competition eroding revenues for legacy products like Eliquis, Revlimid, and Sprycel is a major threat.
- Failure to successfully enforce intellectual property rights could lead to generic competition.
- Inability to successfully integrate and realize benefits from acquisitions and partnerships is a risk.
- Adverse outcomes from legal proceedings, investigations, and product liability lawsuits could negatively impact the company.
- Reliance on third-party suppliers and manufacturers for key products and components creates supply chain risks.
- Challenges in developing, obtaining regulatory approval, and commercializing new products are inherent risks in the biopharmaceutical industry.
- The SEC filings mention ongoing patent litigation in Europe related to Eliquis and lawsuits related to the labeling, sales, and promotion of Plavix.
Valuation Analysis:
- The Enterprise Value to EBITDA ratio ranges from 7.14 to 8.92 across the four quarters, which is significantly lower than the industry average of 49.89.
- The Enterprise Value to Sales ratio ranges from 2.83 to 3.46, which is also significantly lower than the industry average of 9024.47.
- These valuation metrics suggest that BMY may be undervalued compared to its industry peers.
- Potential catalysts include successful product launches, positive clinical trial results, and effective cost management initiatives.
Price Performance:
- BMY's stock price has fluctuated between approximately $50 and $62 from February 2025 to April 2025.
- Over the past year, BMY has outperformed the Health Care Select Sector SPDR Fund (XLV), with returns of 14.64% versus -0.44%. However, over longer periods (2 and 3 years), BMY has underperformed XLV.
- Compared to peers, BMY has outperformed Merck & Co., Inc. (MRK) and GSK Plc (GSK) over the past year, but has underperformed GSK over longer periods.
- The maximum drawdown for BMY was -47.67% on 07/03/2024, indicating significant risk during that period.
Future Outlook:
- Management estimates 2025 revenue to be approximately $45.5 billion, reflecting the impact of generics and the strength of the growth portfolio.
- Non-GAAP earnings per share are projected to be in the range of $6.55 to $6.85 for 2025.
- The company expects an 18% to 20% decline in the legacy portfolio due to LOEs and foreign exchange headwinds of approximately $500 million.
- The first quarter of 2025 is expected to be impacted by inventory destocking and gross-to-net pressures from Medicare Part D redesign.
- Management is focused on becoming a leaner, more efficient company while investing in its growth portfolio and promising areas of science.
- The earnings call highlighted that the company is entering a data-rich period with multiple catalysts over the next 24 months across a significant number of assets.
Summary:
- Bristol Myers Squibb is a global biopharmaceutical company undergoing a strategic transformation, balancing growth initiatives with significant financial and operational challenges.
- Strengths: A diversified portfolio of marketed products, a robust pipeline of late-stage assets, and a strong focus on R&D.
- Weaknesses: High financial leverage, low net profit margin, and liquidity concerns.
- Opportunities: Expanding pipeline through acquisitions and collaborations, new product launches (e.g., Cobenfy), and cost savings initiatives.
- Threats: Increased pricing pressures, generic competition, legal risks, and integration challenges.
- BMY's financial health is mixed, with revenue growth offset by higher costs and intangible asset impairments. The company's high debt levels and low liquidity pose solvency risks.
- Critical factors for future performance include successful product launches, effective cost management, and successful integration of acquisitions.
- Areas requiring further monitoring include debt levels, liquidity position, and the impact of government regulations on pricing and market access.
- Overall, BMY presents a complex investment profile. While the company has growth potential driven by its pipeline and strategic initiatives, it faces significant financial and operational challenges. The valuation metrics suggest that BMY may be undervalued, but investors should carefully consider the company's risk profile and recent volatility when making investment decisions.

Price history

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Fundamentals

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Insights

Revenue is growing, but profitability is hampered by high expenses and unusual items.
The company is highly leveraged, with a debt-to-equity ratio significantly above the industry average, posing solvency risks.
Liquidity is a concern, as indicated by the current and quick ratios being below the industry average.
Cash flow is volatile due to fluctuations in net income and working capital.
Management's focus on cost savings and new product launches could improve future performance, but debt management and liquidity improvement are critical.

Analysis

Revenue - Revenue is on an upward trend, indicating growth in the company's top line, and the most recent quarter exceeded the 8-quarter average. - The 3-year CAGR is less than the 5-year CAGR, suggesting a deceleration in revenue growth over the past three years. - The trailing twelve-month YoY growth is less than the 5-year CAGR, indicating a further deceleration in revenue growth.
- Profitability
  - Gross profit margin is increasing, suggesting improved cost management or premium pricing strategies.
  - Net profit margin is low, indicating potential issues with expense management or other factors affecting profitability.
  - ROAA and ROAE are negative, suggesting inefficient asset utilization and poor returns to shareholders.
  - EBITDA margin is lower than the industry average, indicating lower operating profitability.
- Liquidity
  - The current ratio is below the industry average, suggesting potential liquidity issues.
  - The quick ratio is also below the industry average, further indicating potential liquidity concerns.
  - Cash and short-term investments are increasing, which could help mitigate liquidity risks.
- Solvency
  - The debt-to-equity ratio is significantly higher than the industry average, indicating high financial leverage and potential solvency risks.
  - The debt/EBITDA ratio is below the industry average, suggesting manageable debt levels relative to earnings.
  - Long-term debt is increasing, indicating a reliance on debt financing.
- Operational Efficiency
  - Inventories are decreasing, which could reflect efficient inventory management or potential supply chain issues.
  - Selling, general, and administrative expenses are increasing, which could be a concern if not managed effectively.
  - The company is focused on cost savings and operational efficiency, as highlighted in the earnings call.
- Cash Flow Analysis - Net income is volatile and often negative, raising concerns about the quality of earnings. - Operating cash flow is generally positive but varies significantly, reflecting the impact of net income volatility and changes in working capital. - Free cash flow (FCF) is positive but fluctuates, impacting long-term solvency and financial flexibility.
- Risk Factors
  - High financial leverage, as indicated by the debt-to-equity ratio, poses a solvency risk.
  - Volatile net income and operating cash flow create uncertainty about future financial performance.
  - Increasing operating expenses could erode profitability if not managed effectively.
- Future Outlook
  - Management's focus on cost savings and operational efficiency could improve profitability and cash flow.
  - Strategic initiatives and new product launches could drive future revenue growth.
  - The company needs to manage its debt levels and improve its liquidity position to mitigate financial risks.

Financial statements

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Public filings

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BMS is a leading global biopharmaceutical company focused on innovative medicines across key therapeutic areas, with a diversified portfolio of marketed products and a robust pipeline of late-stage assets.
The company is facing significant pricing pressures and market access challenges globally, particularly due to government actions like the Inflation Reduction Act in the U.S. These pressures could materially impact the company's revenues and profitability.
BMS has been actively expanding its pipeline and capabilities through major acquisitions and strategic collaborations, which carry integration and execution risks.
The company faces a range of legal risks, including patent litigation, product liability lawsuits, and antitrust litigation related to legacy products.
Financial performance has been mixed, with revenue growth offset by higher costs, intangible asset impairments, and fluctuating tax rates. However, the company continues to generate strong operating cash flow.
Overall, BMS faces a challenging operating environment but is actively investing in its pipeline and capabilities to drive long-term growth and innovation. Successful execution of its strategic initiatives will be critical to navigating the pricing pressures and legal risks it faces.

Core Business and Operations:

BMS is a leading global biopharmaceutical company focused on developing innovative medicines across key therapeutic areas like oncology, hematology, immunology, cardiovascular, and neuroscience
Key marketed products include Opdivo, Eliquis, Revlimid, Pomalyst, Sprycel, Orencia, Yervoy, Reblozyl, Opdualag, Abecma, Zeposia, Breyanzi, Camzyos, Sotyktu, Augtyro, Krazati, and Cobenfy
Operates in a single segment with a global research and development organization, supply chain, and regional commercial teams
Key customers include wholesalers, distributors, pharmacies, and government agencies

Industry and Market Trends:

Facing increasing pricing pressures and market access challenges globally due to government actions, including the Inflation Reduction Act (IRA) in the U.S. which mandates price negotiations and rebates
Regulatory and policy changes, such as the IRA and state-level drug pricing initiatives, could significantly impact revenues and profitability
Competitive threats from generic and biosimilar products, particularly for legacy brands like Eliquis, Revlimid, and Sprycel

Recent Events:

Completed major acquisitions of Karuna, RayzeBio, and Mirati to expand pipeline and capabilities in key therapeutic areas
Entered strategic collaboration with SystImmune for co-development and co-commercialization of a bispecific antibody-drug conjugate
Received multiple new product approvals, including Cobenfy for schizophrenia, Breyanzi for lymphoma, and expanded indications for Reblozyl, Opdivo, Krazati, and Augtyro
Initiated a strategic productivity initiative to drive $1.5 billion in annual cost savings by 2025

Risk Factors:

Increased pricing pressures and market access challenges from government actions and policies
Generic and biosimilar competition eroding revenues for legacy products
Failure to successfully enforce intellectual property rights leading to generic competition
Inability to successfully integrate and realize benefits from acquisitions and partnerships
Adverse outcomes from legal proceedings, investigations, and product liability lawsuits
Reliance on third-party suppliers and manufacturers for key products and components
Challenges in developing, obtaining regulatory approval, and commercializing new products

Legal Matters:

Ongoing patent litigation in Europe related to Eliquis composition-of-matter patents and SPCs
Lawsuits related to the labeling, sales, and promotion of Plavix* in Australia
Product liability litigation related to Abilify* and Onglyza*
Securities class action lawsuits related to Celgene's disclosures and the Contingent Value Rights (CVR) agreement
Antitrust litigation related to Thalomid and Revlimid, as well as a Pomalyst antitrust class action

Management's Discussion and Analysis:

Revenues grew 7% year-to-date driven by the Growth Portfolio (Opdivo, Reblozyl, Opdualag, Abecma, Breyanzi, Camzyos, Sotyktu, Augtyro, Krazati, Cobenfy) and Eliquis, partially offset by declines in Revlimid and Sprycel
Gross margins impacted by higher profit sharing, royalties, and intangible asset impairments
Operating expenses increased due to the impact of recent acquisitions, including R&D, marketing, and integration costs
Effective tax rate fluctuated due to discrete items, including non-deductible Acquired IPRD charges and release of tax reserves
Generated strong operating cash flow, but increased investing and financing activities to fund acquisitions and debt

Earnings calls

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Earnings Report 2024Q4 (2025-02-06)

Key takeaways

Cobenfy is a Key Growth Driver: Management is highly optimistic about Cobenfy's potential, viewing it as a significant long-term growth driver and investing heavily in its clinical development across multiple indications.
Cost Savings Initiatives are Prioritized: The company is aggressively pursuing cost savings initiatives to improve financial flexibility and profitability, with a focus on streamlining operations and leveraging technology.
R&D Productivity is Crucial: Improving R&D productivity is a key strategic priority, with efforts focused on accelerating late-stage pipeline programs and ensuring timely data readouts.
Legacy Portfolio Decline is Expected: The company anticipates a significant decline in its legacy portfolio due to generic competition, which will impact near-term revenue.
Business Development Remains a Priority: Management emphasizes that business development is a top priority for capital allocation, with a focus on strengthening core therapeutic areas and acquiring assets that can improve the company's growth profile.
Eliquis Growth is Still Expected: Despite Part D redesign impacts, strong double-digit growth is still expected for Eliquis overall.
Data Readouts are Critical: The company is entering a data-rich period, and the success of these readouts will be crucial in shaping the company's future growth profile.
Camzyos is Performing Well: Camzyos is showing strong and consistent growth, and the company is working to ease echo monitoring requirements to further expand access.

Focus of management’s prepared remarks

2024 Performance and Accomplishments: 2024 was a year of good execution, establishing a solid foundation for achieving top-tier sustainable growth by the end of the decade. The growth portfolio delivered double-digit revenue growth, and the company reestablished its presence in neuroscience with the approval and launch of Cobenfy.
Operational Excellence and Financial Discipline: Operational excellence and financial discipline were top priorities, with significant spend reallocated towards high-potential growth opportunities, achieving most of the targeted $1.5 billion in savings. An additional $2 billion in savings has been identified.
R&D Productivity: Considerable focus was placed on improving R&D productivity, accelerating several programs in the late-stage pipeline, including CEMZIOS and Cobenfy.
Cobenfy Potential: The U.S. approval of Cobenfy in schizophrenia was an important achievement, and the launch is off to a great start. The company sees the potential for additional benefit to patients and has made strategic investments in a broad clinical development program.
Data-Rich Period: The company is entering a data-rich period with multiple catalysts over the next 24 months across a significant number of assets, including Milvexian, Admiral parent, and mezigdamide.
2025 Guidance: Revenue is estimated to be approximately $45.5 billion, reflecting the near-term impact of generics and the continued strength of the growth portfolio. Non-GAAP earnings per share are expected to be in the range of $6.55 to $6.85.
Transformation and Future Growth: BMS is evolving into a fundamentally different company with a clear multiyear plan, strong execution, and an accelerating pipeline. The company expects to have a transformed portfolio of marketed products driving top-tier sustainable growth by the end of the decade.
Expanded Strategic Productivity Initiative: Building on the work done to capture cost savings last year, the company identified additional opportunities to streamline operations, further leverage technology, and drive greater efficiency in its ways of working. As a result, the company expanded the existing program to include approximately $2 billion of incremental run rate operating expense savings with approximately $1 billion to be achieved in 2025 and the remainder by the end of 2027.

Focus of the analyst Q&A

Cobenfy Ramp-Up:
- How will the drug's ramp-up progress in 2025, considering entrenched physician prescribing habits versus the unmet need in schizophrenia?
Long-Term Cost Opportunities:
- After the incremental $2 billion cost program is completed, will there be additional cost opportunities as the company goes through the 2028 LOE cycle?
Part D Redesign Impact:
- What is the quantified assumption for the impact of Part D redesign in 2025?
Cendakimab Update:
- Any updates on the filing plans for cendakimab?
Cobenfy Expansion Opportunities:
- Are there other expansion opportunities for Cobenfy that could be added or accelerated beyond what has been outlined?
- Following the emracladine failure, are there changes to the investment plan being contemplated?
Policy Front and IRA Revisions:
- With RFKJ's nomination potentially imminent, what are the potential impacts on IRA revisions, particularly regarding discounting in the outer years?
Advancement of Timelines:
- What are the keys to delivering progress, particularly the advancement of data readout timelines, while realigning costs and integrating businesses?
Revenue Guidance Differences:
- Where are the biggest differences between the company's revenue guidance for 2025 and consensus estimates? Could Cobenfy be a contributor to the delta?
Earnings Trough:
- Is the previously suggested timing of trough earnings in the very late 2020s (potentially 2028-2029) still accurate? Could a product like Cobenfy pull that forward?
Eliquis Growth:
- How are you thinking about the growth for Eliquis this year, considering the potential tailwind from Part D redesign?
Gross Margin Cadence:
- Can you provide color on the gross margin cadence for 2025? Should we follow the REVLIMID step-downs for the year, or are there other considerations?
Opdivo Quvantic Access and Coverage:
- Any early insights into the access and coverage of Opdivo Quvantic, and any thoughts on the uptake for 2025?
Business Development Strategy:
- Can you walk us through your process in determining why you went for Karuna when you wanted to get into schizophrenia?
Camzyos Uptake:
- What is driving the uptake of Camzyos?
Adjunct Schizophrenia Trial Risk:
- What is the risk associated with the adjunct schizophrenia trial for Cobenfy, given the high failure rate of similar trials?
Camzyos Label Update Goals:
- Are you aiming for 6-month echo monitoring requirements for Camzyos, and how will that help expand access into the community setting?
Productivity Initiative Run Rate:
- Should we think about the run rate year-end 2027 for the new productivity initiative as being $15 billion, an incremental $1 billion off of the $16 billion now?
Iberdomide MRD Endpoint:
- Did the FDA sign off on the addition of the MRD endpoint for iberdomide? Can you get approval on just an MRD endpoint, or do you need follow-up data from the PFS? What kind of efficacy delta would you need on MRD?
Business Development TA Alignment:
- Can you talk a little bit about TA alignment, kind of what good looks like, particularly in the context of the organization you have right now?
Cobenfy Gross-to-Net Evolution:
- Can you discuss the gross-to-net evolution for Cobenfy as access evolves from initial private pay to more of the government setting, then adding on a little bit of the commercial environment?
Cobenfy Patient Experience:
- Can you talk about the patient experience that you're seeing so far in the field, particularly regarding tolerability and BID dosing?
Multiple Myeloma Opportunity:
- Where do you think novel oral drugs like iberdomide or resignomide could appropriately fit within the context of the overall multiple myeloma market, given the availability of generic Revlimid and POMALYST?
LOE Performance and 2026 Setup:
- Could you discuss the impact of LOE performance in 2025 on the trajectory of growth for the company in 2026?
YERVOY Growth Prospects:
- Can you comment on growth prospects for YERVOY going forward?
MRD Durability:
- Is there a time course that the FDA wants as far as how much durability on that MRD?
Targeted Radiotherapeutic Portfolio:
- Can you speak to the expectations for the cadence of data for the targeted radiotherapeutic portfolio and prioritization of further investment in BD and internal development, following that investment in the infrastructure in that segment?
RISE Expectations:
- What are BMY's expectations for the PANSS score benefit in the RISE trial?
ADP 2 Disclosure:
- Any color on how ADP 2 will be disclosed? Will the MPIC be top line in the PR? And will this be followed by a full data set at a Medical Congress?
Camzyos Label Update and Peak Opportunity:
- With the label change in the EU and potentially a change in the U.S. as well, how do you see the peak opportunity now?
Cobenfy Drug Availability:
- One of the tails we recently spoke to said that there was an issue with drug availability at average pharmacies is what he said. I was wondering if this is just a one-off or just does it just take time to ramp up availability?
Camzyos RANS Data:
- What data did you submit to the FDA for the less restrictive camsiosrans? Did that include anything additional versus what was submitted to -- and are you asking the agency for the same 2 updates that were proposed in the December agenda?
Second-Generation TYK2 Plans:
- Bristol's second-generation TYK2 completed Phase I in psoriasis in August of 2024, but hasn't progressed. So curious what the profile of this agent is, what are plans and is IBD within those plans?
Milvexian Readout Timing:
- Milvexian Phase III readouts in stroke and ACS are expected in 2026, but later in the year. Curious if events are tracking for that 2026 readout and is there any possibility at all for a 2025 readout for either trial?
Long-Term Growth Potential:
- Can you imply the key assets you expect to drive revenue looking at the back end of the decade, maybe your favorite child or 2?

Summary

Financial Performance

Bristol-Myers Squibb (BMY) reported strong Q4 2024 sales growth of 9% to $12.3 billion, driven by volume growth and higher inventory levels. The growth portfolio saw a 23% increase, representing over half of total revenue. Diluted earnings per share were $1.67 for the quarter and $1.15 for the full year. For 2025, revenue is estimated at approximately $45.5 billion, and non-GAAP earnings per share are projected to be in the range of $6.55 to $6.85. The company highlighted a strong cash position with $11.2 billion in cash equivalents and marketable securities.
Revenue Drivers

Revenue growth was primarily driven by the growth portfolio, including BREYANZI, Krazati, Reblozyl, and Opdivo. Eliquis also contributed significantly with strong U.S. sales growth. The launch of Cobenfy in schizophrenia is off to a strong start. The legacy portfolio is expected to decline due to generic competition affecting Revlimid, Abraxane, Sprycel, and Pomalyst. Opdivo is expected to have low single-digit growth.
Profit Margins and Cost Management

Gross margin declined by approximately 240 basis points in Q4, mainly due to product mix. Operating expenses increased by approximately 8%, driven by R&D investments, partially offset by cost savings. The company is expanding its strategic productivity initiative to achieve an additional $2 billion in savings, with $1 billion expected in 2025 and the remainder by the end of 2027. This expanded program will see the incremental savings drop to the bottom line. Gross margin for 2025 is expected to be approximately 72%. Operating margin is expected to be approximately 37% for 2025.
Guidance and Outlook

The company estimates 2025 revenue to be approximately $45.5 billion, reflecting the impact of generics and the strength of the growth portfolio. An 18% to 20% decline is expected in the legacy portfolio due to LOEs and foreign exchange headwinds of approximately $500 million. Non-GAAP earnings per share are projected to be in the range of $6.55 to $6.85. The first quarter of 2025 is expected to be impacted by inventory destocking and gross-to-net pressures from Medicare Part D redesign.
Strategic Initiatives

BMS is focused on becoming a leaner, more efficient company while investing in its growth portfolio and promising areas of science. Key initiatives include streamlining operations, leveraging technology, and driving greater efficiency. The company is prioritizing business development and debt repayment. They have repaid approximately $6 billion of the $10 billion debt commitment. The company is also focused on improving R&D productivity and accelerating programs in the late-stage pipeline.
Management Commentary

Management expressed confidence in the company's multiyear plan and its ability to achieve top-tier sustainable growth by the end of the decade. They emphasized the importance of operational excellence, financial discipline, and investing in growth opportunities. The tone was optimistic regarding the potential of Cobenfy and the upcoming data catalysts. Management highlighted the company's commitment to reshaping BMS and delivering transformational medicines to patients.
Industry and Market Conditions

The company acknowledged the impact of generic competition and Medicare Part D redesign on its financial performance. They are closely monitoring the evolving competitive landscape and adapting their strategies accordingly. Management expressed a willingness to work with the new Congress and the Trump administration on policies that strengthen the ecosystem for innovation.

Comparative analysis

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Benchmarks (as of 2025-03-26)

Health Care Select Sector SPDR Fund (XLV)

Performance Comparison:
- Bristol Myers Squibb Co. (BMY) has shown mixed performance compared to the Health Care Select Sector SPDR Fund (XLV). Over the past year, BMY has outperformed XLV, with returns of 14.64% versus -0.44%. However, over longer periods (2 and 3 years), BMY has underperformed, with annualized returns of -2.66% and -3.07%, respectively, compared to XLV's 8.47% and 3.44%. This suggests that while BMY has had a strong recent performance, its longer-term returns have lagged behind the broader healthcare sector.
Risk and Return Analysis:
- The annualized returns indicate that BMY has provided lower returns than XLV over the 2 and 3-year periods, but higher returns over the past year.
- BMY's annualized volatility has fluctuated significantly, with periods of both high and low volatility. In recent months, BMY's volatility has been notably higher than XLV's, indicating increased risk. For example, in August 2024, BMY's volatility reached 44.8%, while XLV's was 15.72%.
- The maximum drawdown for BMY was -47.67% on 07/03/2024, much larger than XLV's maximum drawdown of -16.06% on 06/17/2022. This indicates that BMY is subject to more significant declines from previous peaks, reflecting a higher risk profile.
Risk-Adjusted Performance:
- The Sharpe Ratio analysis reveals that XLV has generally offered better risk-adjusted returns compared to BMY. While BMY showed some periods of higher Sharpe ratios, its overall volatility and larger drawdowns have resulted in less consistent risk-adjusted performance.
- BMY's Beta values have generally been below 1, indicating lower sensitivity to market movements compared to XLV. However, the Beta has shown an increasing trend recently, suggesting a growing correlation with the market.
Overall Assessment:
- Based on the analysis, Bristol Myers Squibb Co. (BMY) presents a mixed investment profile compared to the Health Care Select Sector SPDR Fund (XLV). While BMY has demonstrated strong recent performance over the past year, its longer-term returns have underperformed the benchmark. The stock exhibits higher volatility and larger drawdowns, indicating a riskier investment. The Sharpe Ratio suggests that XLV has provided more consistent risk-adjusted returns. Investors should carefully consider their risk tolerance and investment horizon when evaluating BMY, taking into account its recent outperformance but also its higher volatility and potential for significant drawdowns.

Peers Price History(as of 2025-03-26)

Merck & Co., Inc. (MRK)GSK Plc (GSK)

Performance Comparison:
- Bristol Myers Squibb (BMY) has shown mixed performance compared to its peers. Over the past year, BMY has outperformed both Merck & Co., Inc. (MRK) and GSK Plc (GSK), with returns of 14.64% compared to -31.25% for MRK and -7.97% for GSK. However, over longer periods such as 2 and 3 years, BMY has underperformed GSK. For example, over 3 years, BMY's return was -8.94% compared to 18.23% for MRK.
Risk and Return Analysis:
- BMY's annualized returns have been volatile. While the 1-year annualized return is 14.64%, the 2-year and 3-year returns are -2.66% and -3.07%, respectively. This contrasts with MRK, which has a 3-year annualized return of 5.74%. BMY's annualized volatility has also fluctuated, ranging from approximately 11% to 44% over the past few years. The maximum drawdown for BMY was -47.67% on 2024-07-03, indicating significant risk during that period.
Risk-Adjusted Performance:
- The Sharpe Ratio for BMY has generally been lower than its peers, suggesting that BMY has not offered as favorable risk-adjusted returns. For much of the period between Q1 2022 and Q1 2025, BMY's Sharpe Ratio was negative, indicating poor risk-adjusted performance. BMY's beta values have consistently been below 1, indicating lower sensitivity to market movements compared to its peers.
Overall Assessment:
- BMY's recent outperformance over the past year is notable, but its longer-term performance has been less impressive. The high maximum drawdown and fluctuating volatility suggest a higher risk profile compared to its peers. While BMY's beta indicates lower market sensitivity, its Sharpe Ratio suggests that the risk-adjusted returns have been less favorable. Investors should carefully consider BMY's risk profile and recent volatility when making investment decisions, and weigh its recent performance against its longer-term trends.

Peers Fundamentals(as of 2024-12-31)

Merck & Co., Inc. (MRK)GSK Plc (GSK)

Market Position and Size:
- Bristol Myers Squibb (BMY) has a substantial market capitalization of $120,155.45 million, positioning it as a significant player in the pharmaceutical industry.
- While BMY's market cap is less than Merck & Co. (MRK) at $222,569.38 million, it is greater than GSK Plc (GSK) at $60,020.33 million.
- BMY's revenue of $48,300 million is less than MRK's $63,973 million but greater than GSK's $31,376 million. Similarly, its EBITDA of $18,489 million is less than MRK's $25,776 million but greater than GSK's $8,546 million.
- However, BMY reported a net loss of -$8,948 million, contrasting with MRK's net income of $17,117 million and GSK's $2,575 million. This net loss impacts BMY's overall market perception and financial standing.
Profitability and Efficiency:
- BMY's Gross Profit Margin is 56.8%, which is less than MRK's 74.68% and GSK's 71.69%.
- Its EBITDA Margin is 38.28%, less than MRK's 40.29% but greater than GSK's 27.24%.
- BMY's Net Profit Margin is -18.53%, significantly less than MRK's 26.76% and GSK's 8.21%.
- BMY's Return on Average Assets is -9.53%, less than MRK's 15.3% and GSK's 4.35%. Its Return on Average Total Equity is -39.1%, also less than MRK's 40.81% and GSK's 19.06%.
- These figures indicate that BMY is underperforming in net profitability and efficiency compared to its peers.
Financial Health and Stability:
- BMY's Current Ratio is 1.25, less than MRK's 1.36 but greater than GSK's 0.78. Its Quick Ratio is 1.15, equal to MRK's 1.15 and greater than GSK's 0.52.
- BMY's Total Debt to Total Equity Ratio is 313.44, significantly greater than MRK's 82.63 and GSK's 124.25, indicating higher financial leverage.
- Its Debt / EBITDA ratio is 2.69, greater than MRK's 1.44 and GSK's 1.99, but still below the industry average.
- BMY's liquidity is comparable to its peers, but its high debt levels relative to equity are a concern for its long-term financial stability.
Valuation and Market Perception:
- BMY's Enterprise Value To Sales is 3.22, less than MRK's 4.33 but greater than GSK's 2.18. Its Enterprise Value To EBITDA is 8.33, less than MRK's 10.7 but greater than GSK's 7.99.
- Due to negative earnings, BMY does not have a Price To Earnings ratio.
- BMY's Price to Book Ratio is 7.35, greater than MRK's 4.81 and GSK's 4.4. Its Price To Sales Ratio is 2.48, less than MRK's 3.5 but greater than GSK's 1.95.
- These valuation metrics suggest that BMY may be undervalued compared to MRK but overvalued compared to GSK. However, the negative earnings and high debt levels should be considered.
Cash Flow and Capital Management:
- BMY's Net Operating Cash Flow is $15,190 million, less than MRK's $21,468 million but greater than GSK's $6,091 million.
- Its Total Capital Expenditure is $1,248 million, less than MRK's $3,372 million and GSK's $2,982 million.
- BMY's Free Cash Flow is $13,942 million, less than MRK's $18,096 million but greater than GSK's $3,109 million.
- BMY's cash flow generation is strong relative to its size, and its free cash flow margin is 0.29, greater than MRK's 0.28 and GSK's 0.1.
Growth and Future Prospect:
- BMY shows consistently higher growth in Sales/Revenue and Free Cash Flow compared to the peer group average.
- However, its Net Income and Basic Earnings per Share have significant year-to-year fluctuations.
- BMY's 5-year CAGR for Sales/Revenue (13.06%) is significantly greater than its 3-year CAGR (1.36%), suggesting that revenue growth has slowed down in recent years.
- The deceleration in revenue, EBITDA, and free cash flow growth suggests potential challenges in maintaining its market share and competitive position.
Potential for Investment:
- BMY presents a mixed investment picture. Its strong market position and cash flow generation are positive factors.
- However, the current net loss, high debt levels, and decelerating growth rates raise concerns.
- Investors should carefully consider these factors and assess whether BMY's potential for future growth and profitability justifies the risks associated with its financial leverage and recent performance.
Key Risks and Considerations:
- BMY's high debt levels could limit its financial flexibility and increase its vulnerability to economic downturns.
- The current net loss and decelerating growth rates raise concerns about its future profitability and market position.
- Investors should monitor BMY's ability to improve its profitability and reduce its debt levels.
Overall Assessment:
- BMY's financial health is mixed. It has a strong market position and generates significant cash flow, but its current net loss and high debt levels are concerning.
- While its liquidity is adequate, the high leverage and decelerating growth rates pose challenges to its long-term financial stability.
- BMY holds a mid-range position within its peer group, but its negative profitability and high debt levels weaken its competitive standing compared to MRK.

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