| Snowflake Score | |
|---|---|
| Valuation | 4/6 |
| Future Growth | 4/6 |
| Past Performance | 1/6 |
| Financial Health | 3/6 |
| Dividends | 5/6 |
BMY Stock Overview
Bristol-Myers Squibb Company discovers, develops, licenses, manufactures, and markets biopharmaceutical products worldwide.
Bristol-Myers Squibb Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$75.57 |
| 52 Week High | US$80.59 |
| 52 Week Low | US$53.22 |
| Beta | 0.39 |
| 1 Month Change | 1.40% |
| 3 Month Change | -0.30% |
| 1 Year Change | 11.94% |
| 3 Year Change | 60.86% |
| 5 Year Change | 33.94% |
| Change since IPO | 430.32% |
Recent News & Updates
Earning 10% Income On Bristol Myers Squibb With Options
Bristol Myers Squibb is attractive with a 10% earnings yield, 3% dividend yield, and tenacious performance over the last several quarters. Growth is lacking as BMY is losing market share to generic alternatives, especially for important earner Revlimid. I have executed a covered write trade on BMY that earns 10% in annualized income (see Options Cheat Sheet below). A picture is worth a thousand words, but a chart is worth a thousand pictures. Investing has not been easy this year with stocks finishing their worst first half since 1970. The debate about whether or not we are heading for recession is frenzied. Back in June I wrote that recession had already begun and forecasted a negative real GDP print for Q2 2022. That prediction came true on July 28 when the Q2 real GDP printed at -0.9%. The U.S. now has two consecutive quarters of negative real GDP growth, after Q1 was -1.6%, which is a traditional measure of recession. My investment perspective always begins with macro because macro is paramount to the underlying performance of each asset. Recession and tightener monetary policy necessitate greater care in investment decisions. That's why I'm avoiding entire sectors such as consumer discretionary at this time. Instead, I've been on the hunt for smart opportunities and meaningful income. Healthcare has been a preferential sector for me over the past year. This is because valuations have been attractive and healthcare has some resiliency to recession. Bristol Myers Squibb (BMY) is one of those healthcare equities that I have been watching. The company has demonstrated consistency and remarkable strength in the face of momentous sell offs. I especially prefer their product portfolio of cancer, hematology, and cardiovascular medications that are required for life threatening and life debilitating diseases. These qualities confer priority to these drugs for patients that may need to tighten up budgets due to inflation. Q2 Earnings Performance Bristol Myers Squibb released their Q2 2022 earnings in July. The results were solid with non-GAAP EPS beating estimates at $1.93 and revenues up 1.7% YoY. Non-GAAP earnings per share increased by 18.4% YoY. However, both Q2 2022 and Q2 2021 suffered from in-process R&D charges. Excluding those charges non-GAAP EPS only increased by 7%. BMY has $10.2 billion in remaining share repurchases authorized, equal to 6.6% of market cap. The company ended the quarter with a respectable long term debt to capital ratio of 50.13. With $0.93 of free cash flow per share in Q2, BMY is operating a FCF to debt ratio of 0.322. Therefore, I think the debt obligations are manageable. BMY data by YCharts Sluggish Growth Updates to the company's pharmaceutical portfolio were provided during the quarterly earnings call. I noted several positive developments that will contribute to growth: Received U.S. FDA approval for Breyanzi Phase 2 data for Milvexian was positive Reached agreement to acquire Turning Point Therapeutics Expected approval of Deucravacitinib next month Launch of Camzyos with free trial prescriptions ending soon Approval of Deucravacitinib in September and ready for launch Below is a progress update of the near term catalysts in the portfolio. Negative developments have been experienced for bempeg. Clinical development for bempeg has now ceased which caused Nektar, BMY's partner on the trial, to receive a downgrade from JPMorgan. Other pharmaceuticals are experiencing positive progress. Seeking Alpha (company Q2 2022 earnings call presentation) When discussing drugs that are currently in production, Chief Financial Officer David Elkins said this during the teleconference: Second quarter revenues were approximately $11.9 billion, growing 5% year-over-year. This performance was driven by robust growth of our in line and new product portfolio of 16%, more than offsetting our recent LOEs. Loss of exclusivity ((LOE)) drugs are a primary concern for R&D companies like BMY. Similar to the way that oil and gas or mining companies operate, BMY needs to replace pharmaceutical "reserves" as drug patents expire and generics appropriate market share. Recent LOEs accounted for 22.7% of Q2 revenues and that segment experienced a 22% YoY decline. Seeking Alpha (company Q2 2022 earnings call presentation) One of my top concerns is the decline in Revlimid. This product experienced a revenues decline of 22% YoY due to increased competition from generic alternatives. Revlimid accounted for 21% of Q2 revenues and management is guiding for $9-9.5 billion in revenues from Revlimid in 2022. This means that they expect revenues of $1.851-2.101 billion in Q3 and Q4 from the drug. That would represent a 24-33% decrease in revenues during 2022. In total, estimates suggest that BMY is going to endure a $10 billion loss in revenues due to generics this year. Q1 Q2 Q3 & Q4 (estimate) $2.797B $2.501B $1.851-2.101B This is what Elkins said about Revlimid during the call: Sales in the quarter were approximately $2.5 billion. Sales were primarily impacted by generic entry, particularly in international markets. In the US, while we did experience demand softness from the volume generic entry in the quarter, we understand that specialty pharmacies are mainly utilizing the current generic for new patients to ensure continuity of treatment. Fortunately, management did reaffirm 2022 guidance of $7.44-7.74 non-GAAP diluted EPS. Analysts continue to expect annual increases in EPS through 2024, as shown below. Although estimates are only expecting an 11.1% increase in EPS over the next two years. BMY data by YCharts BMY analysts on FAST Graphs have a good track record of 1 year forward through 2009 which includes two recessions. Analysts were most wrong in 2009 when they missed earnings by 6.5%, a minor miss. Those analysts are expecting no growth to earnings in 2022, 7% growth in 2023, and 4% growth in 2024. Track record of analyst estimates (FAST Graphs) The Price is Right What I can't complain about is the price for the company's current performance. BMY is trading at an adjusted P/E of 9.62. This is nearly half of the 10-year normal adjusted P/E of 18.22.
Bristol-Myers Squibb: Nowhere To Go Even After Q2
BMYs valuation indicates upside potential, while its financials give no reason for a significant rise in stock price. BMYs business model is known to be recession-proof, which could save it from a steep decline should the bear market continue. It's fundamentals are good but less than it's last years averages, leading to a more pessimistic look. Current FDA approvals and it's pipeline don't indicate significantly higher growth in the future. With this article, I want to explain why BMY has nowhere, either up or down, to go in the next time. For this, I will mainly write about the financials. Investment thesis Bristol-Myers Squibb (BMY) had a good run in the past, generating good results regarding the stock price and fundamentally. In recent history, growth slowed down, which is again seen in the recent Q2 earnings presentation. Since healthcare, and pharmaceuticals, in particular, are known to be recession-proof, Bristol-Myers Squibb performed well this year, outperforming the general market by a good margin. I maintain that slowed growth will hinder the stock from surging higher while they, due to their function as a save-haven, will probably not drop even when the market turns down even more. To explain this, I would focus on the financials instead of the business model, product pipelines or the pharmaceutical market. Financials Growth Between 2012 and 2021, BMY grew its sales by 18% and its EBIT by 28% ("CAGR"). These numbers were influenced mainly by acquisitions. Organic growth is around 8% annually, which isn't great. In Q2 earnings, which were just released, sales grew just 2% YoY (5% without forex changes), and Non-GAAP diluted EPS increased by 18.4% YoY. While I can't complain about the EPS growth, a measly 2% sales growth is not a good sign. To understand their growth rates, we have to look at the product groups: loss of exclusivity (LOE) products, in-line and new products. Revenue composition (bms.com/investors) LOE products are pharmaceuticals whose patents have run out and can be sold by other companies. Therefore prices and demand drops. One of BMY's LOEs is Revlimid, its former blockbuster product. However, its loss of sales of 22% has greatly upset the 11% growth of its in-line and new products. As of now, LOEs stand for roughly 23% of its overall sales, which is still a significant portion and will therefore upset its overall growth in the coming quarters. According to BMY's annual report 2021, Opdualag and CAMZYOS have the potential for $4+ billion in sales, making up roughly 2/3 of Revlimid's sales. There are other products in the pipeline that will bring in sales in future, but I don't see anything of them fueling significant growth soon. Analyst forecasts also reflect this: Revenue forecast (seekingalpha.com) Earnings forecast (seekingalpha.com) For the year 2025, analysts expect revenue of $50.3 billion which is 8.4% above the 2021 annual revenue and would therefore account for 2.1% revenue growth till 2025. Even when we assume that 2025 revenue is 10% above what the analysts expect, it will account for 4.8% annual growth until 2025. Earnings are expected to be $8.6 billion in 2025, meaning 15.3% total and 3.8% annual upside. Assuming 10% higher earnings, we would get 26.8% total and 6.7% annual upside. Operating cash flow shrank QoQ by 39.5% and YoY by 25.8% to $2.3 billion, so there is no growth either. That is nothing I think will fuel a significant rise in share price. With the Q2 earnings, BMY lowered its full-year guidance to $46 billion in revenue and $7.44-7.74 (7.59 median) Non-GAAP EPS. 2022 guidance (bms.com/investors) To bring that into perspective, the full-year revenue was $46.395 billion and $7.51 Non-GAAP EPS last year. We see a slight decline in revenue and maybe a bit of growth in EPS. Why is that? According to its Q2 earnings, it is mainly to reflect forex changes. Profitability BMYs profitability is excellent, earning an A+ in the Seeking Alpha profitability rating. The metrics are almost all above the sector median and mostly above BMYs own five-year average. Just competitors like Abbvie (ABBV) or Merck (MRK) have a few better profitability metrics. BMY profitability (seekingalpha.com) As you can see below, margins have been shrinking since the start of the year. Not much, obviously, but nothing that improves and could create upside in the share price. BMY Gross Profit Margin (Quarterly) data by YCharts Valuation BMY's performance wasn't the best in the last few years, as I will explain later. Meanwhile, the business itself performed very well, leading to an undervaluation. BMYs dynamic valuation (Aktienfinder.net) Above, you can see a dynamic view of BMYs valuation. The dashed line represents the 'fair value adjusted earnings' and the yellow line the 'fair value cash flow'. Both are oriented on historical averages. Easy to see that since 2017 the valuation has been rather low. DCF-Model - five years I have put the following data into my DCF model: Revenue growth: 2% until 2026 EBITDA margin: 40% until 2026 EBIT margin: 20% until 2026 Long-term growth rate: 2% WACC: 4.55% My DCF model is very detailed, but these are the most important numbers. DCF model (Author) As you can see, my DCF model gives a price target of roughly $120, which implements an upside of 62%. Performance As mentioned earlier, the performance has lacked a bit since 2017, even though it performed very well in the past. Since its inception, BMY has generated a 1200% total return, outperforming the 900% the S&P 500 did in the same timeframe. BMY Total Return Level data by YCharts Looking at the last five years, you can see that BMY started to catch up with the market at the beginning of this year. Simultaneously, the S&P 500 fell due to inflation, rate hikes, war and recession fears since the beginning of the year. This led to a (short-lived) outperformance, the first since 2018.
Shareholder Returns
| BMY | US Pharmaceuticals | US Market | |
|---|---|---|---|
| 7D | 4.8% | -0.6% | 1.3% |
| 1Y | 11.9% | 0.7% | -11.7% |
Return vs Industry: BMY exceeded the US Pharmaceuticals industry which returned 0.7% over the past year.
Return vs Market: BMY exceeded the US Market which returned -11.7% over the past year.
Price Volatility
| BMY volatility | |
|---|---|
| BMY Average Weekly Movement | 2.7% |
| Pharmaceuticals Industry Average Movement | 11.7% |
| Market Average Movement | 7.8% |
| 10% most volatile stocks in US Market | 16.9% |
| 10% least volatile stocks in US Market | 3.2% |
Stable Share Price: BMY is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 3% a week.
Volatility Over Time: BMY's weekly volatility (3%) has been stable over the past year.
About the Company
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 1887 | 32,200 | Giovanni Caforio | https://www.bms.com |
Bristol-Myers Squibb Company discovers, develops, licenses, manufactures, and markets biopharmaceutical products worldwide. It offers products for hematology, oncology, cardiovascular, immunology, fibrotic, neuroscience, and covid-19 diseases. The company’s products include Revlimid, an oral immunomodulatory drug for the treatment of multiple myeloma; Eliquis, an oral inhibitor for reduction in risk of stroke/systemic embolism in NVAF, and for the treatment of DVT/PE; Opdivo for anti-cancer indications; Pomalyst/Imnovid indicated for patients with multiple myeloma; and Orencia for adult patients with active RA and psoriatic arthritis.
Bristol-Myers Squibb Fundamentals Summary
| BMY fundamental statistics | |
|---|---|
| Market Cap | US$161.36b |
| Earnings (TTM) | US$6.62b |
| Revenue (TTM) | US$47.14b |
24.4x
P/E Ratio3.4x
P/S RatioIs BMY overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| BMY income statement (TTM) | |
|---|---|
| Revenue | US$47.14b |
| Cost of Revenue | US$9.54b |
| Gross Profit | US$37.60b |
| Other Expenses | US$30.98b |
| Earnings | US$6.62b |
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
Oct 26, 2022
| Earnings per share (EPS) | 3.10 |
| Gross Margin | 79.76% |
| Net Profit Margin | 14.04% |
| Debt/Equity Ratio | 128.8% |
How did BMY perform over the long term?
See historical performance and comparisonDividends
2.9%
Current Dividend Yield69%
Payout RatioValuation
Is BMY undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score
4/6Valuation Score 4/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast
Key Valuation Metric
Which metric is best to use when looking at relative valuation for BMY?
Other financial metrics that can be useful for relative valuation.
| What is BMY's n/a Ratio? | |
|---|---|
| n/a Ratio | 0x |
| n/a | n/a |
| Market Cap | US$161.36b |
| Key Statistics | |
|---|---|
| Enterprise Value/Revenue | 4.1x |
| Enterprise Value/EBITDA | 9x |
| PEG Ratio | 1.1x |
Price to Earnings Ratio vs Peers
How does BMY's PE Ratio compare to its peers?
| BMY PE Ratio vs Peers |
|---|
| Company | PE | Estimated Growth | Market Cap |
|---|---|---|---|
| Peer Average | 28.5x | ||
MRK Merck | 13.5x | 10.2% | US$225.3b |
PFE Pfizer | 9.2x | -14.5% | US$271.0b |
LLY Eli Lilly | 50.3x | 22.2% | US$286.2b |
ZTS Zoetis | 38.8x | 10.5% | US$81.1b |
BMY Bristol-Myers Squibb | 24.4x | 21.8% | US$159.0b |
Price-To-Earnings vs Peers: BMY is good value based on its Price-To-Earnings Ratio (24.4x) compared to the peer average (28.5x).
Price to Earnings Ratio vs Industry
How does BMY's PE Ratio compare vs other companies in the US Pharmaceuticals Industry?
Price-To-Earnings vs Industry: BMY is expensive based on its Price-To-Earnings Ratio (24.4x) compared to the US Pharmaceuticals industry average (16.2x)
Price to Earnings Ratio vs Fair Ratio
What is BMY's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
| Fair Ratio | |
|---|---|
| Current PE Ratio | 24.4x |
| Fair PE Ratio | 31.9x |
Price-To-Earnings vs Fair Ratio: BMY is good value based on its Price-To-Earnings Ratio (24.4x) compared to the estimated Fair Price-To-Earnings Ratio (31.9x).
Share Price vs Fair Value
What is the Fair Price of BMY when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: BMY ($75.57) is trading below our estimate of fair value ($159.58)
Significantly Below Fair Value: BMY is trading below fair value by more than 20%.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is less than 20% higher than the current share price.
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Future Growth
How is Bristol-Myers Squibb forecast to perform in the next 1 to 3 years based on estimates from 18 analysts?
Future Growth Score
4/6Future Growth Score 4/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE
21.8%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: BMY's forecast earnings growth (21.8% per year) is above the savings rate (1.9%).
Earnings vs Market: BMY's earnings (21.8% per year) are forecast to grow faster than the US market (14.4% per year).
High Growth Earnings: BMY's earnings are expected to grow significantly over the next 3 years.
Revenue vs Market: BMY's revenue (2.1% per year) is forecast to grow slower than the US market (7.9% per year).
High Growth Revenue: BMY's revenue (2.1% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: BMY's Return on Equity is forecast to be very high in 3 years time (50.2%).
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Past Performance
How has Bristol-Myers Squibb performed over the past 5 years?
Past Performance Score
1/6Past Performance Score 1/6
Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE
-15.2%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: BMY has a large one-off loss of $3.5B impacting its June 30 2022 financial results.
Growing Profit Margin: BMY became profitable in the past.
Past Earnings Growth Analysis
Earnings Trend: BMY's earnings have declined by 15.2% per year over the past 5 years.
Accelerating Growth: BMY has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.
Earnings vs Industry: BMY has become profitable in the last year, making it difficult to compare its past year earnings growth to the Pharmaceuticals industry (15.5%).
Return on Equity
High ROE: Whilst BMY's Return on Equity (20.32%) is high, this metric is skewed due to their high level of debt.
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Financial Health
How is Bristol-Myers Squibb's financial position?
Financial Health Score
3/6Financial Health Score 3/6
Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage
Financial Position Analysis
Short Term Liabilities: BMY's short term assets ($30.2B) exceed its short term liabilities ($20.9B).
Long Term Liabilities: BMY's short term assets ($30.2B) do not cover its long term liabilities ($46.8B).
Debt to Equity History and Analysis
Debt Level: BMY's net debt to equity ratio (88.2%) is considered high.
Reducing Debt: BMY's debt to equity ratio has increased from 55.5% to 128.8% over the past 5 years.
Debt Coverage: BMY's debt is well covered by operating cash flow (36.6%).
Interest Coverage: BMY's interest payments on its debt are well covered by EBIT (8.9x coverage).
Balance Sheet
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Dividend
What is Bristol-Myers Squibb current dividend yield, its reliability and sustainability?
Dividend Score
5/6Dividend Score 5/6
Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage
2.86%
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: BMY's dividend (2.86%) is higher than the bottom 25% of dividend payers in the US market (1.49%).
High Dividend: BMY's dividend (2.86%) is low compared to the top 25% of dividend payers in the US market (4%).
Stability and Growth of Payments
Stable Dividend: BMY's dividends per share have been stable in the past 10 years.
Growing Dividend: BMY's dividend payments have increased over the past 10 years.
Earnings Payout to Shareholders
Earnings Coverage: With its reasonable payout ratio (69.4%), BMY's dividend payments are covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: With its reasonably low cash payout ratio (31.8%), BMY's dividend payments are well covered by cash flows.
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Management
How experienced are the management team and are they aligned to shareholders interests?
6.1yrs
Average management tenure
CEO
Giovanni Caforio (57 yo)
7.25yrs
Tenure
US$19,784,806
Compensation
Dr. Giovanni Caforio, M.D., serves as the Chief Executive Officer at Bristol-Myers Squibb Belgium NV/SA. He serves as Member of Business Roundtable and Chief Executive Officer Roundtable on Cancer. Dr. Caf...
CEO Compensation Analysis
Compensation vs Market: Giovanni's total compensation ($USD19.78M) is above average for companies of similar size in the US market ($USD12.88M).
Compensation vs Earnings: Giovanni's compensation has been consistent with company performance over the past year.
Leadership Team
Experienced Management: BMY's management team is seasoned and experienced (6.1 years average tenure).
Board Members
Experienced Board: BMY's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: BMY insiders have only sold shares in the past 3 months.
Recent Insider Transactions
Ownership Breakdown
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Top Shareholders
Company Information
Bristol-Myers Squibb Company's employee growth, exchange listings and data sources
Key Information
- Name: Bristol-Myers Squibb Company
- Ticker: BMY
- Exchange: NYSE
- Founded: 1887
- Industry: Pharmaceuticals
- Sector: Pharmaceuticals & Biotech
- Implied Market Cap: US$161.361b
- Shares outstanding: 2.14b
- Website: https://www.bms.com
Number of Employees
Location
- Bristol-Myers Squibb Company
- 430 East 29th Street
- 14th Floor
- New York
- New York
- 10016
- United States
Listings
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2022/08/12 00:00 |
| End of Day Share Price | 2022/08/12 00:00 |
| Earnings | 2022/06/30 |
| Annual Earnings | 2021/12/31 |
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.