Bristol-Myers Squibb Company

New York Stock Exchange
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Slightly Bullish +25

A Look At Bristol Myers Squibb (BMY) Valuation As Shares Show Mixed Recent Returns

AI-generated analysis

📊 Bristol-Myers Squibb (BMY) shares closed at $59.43, showing mixed returns over the past week and month.

📈 The stock gained 8.77% over the last 90 days and 11.17% year-to-date, indicating short-term momentum.

💰 Total shareholder return has been modest at 6% over one year and 14.28% over five years.

🏥 Full-year 2024 revenues reached $48.3 billion, representing a 7% increase from the previous year.

⚠️ The company reported a GAAP loss of $(4.41) per share in 2024 compared to $3.86 profit in 2023.

📉 Non-GAAP EPS decreased significantly to $1.15 down from $7.51 in 2023.

🌱 Growth portfolio revenues grew 17% to $22.6 billion, showing strong performance of newer products.

🧮 A valuation model suggests a fair value of $65.00, implying the stock is currently undervalued by about 8.6%.

💹 The current P/E ratio of 17.2x is slightly above the US pharmaceutical average but below peer averages.

⚠️ Investors face risks including potential revenue declines from 2025 guidance and execution on a US$2 billion cost savings program.

🔍 This analysis focuses on growth portfolio margins and future earnings power rather than short-term GAAP losses.

🛡️ The article recommends using Simply Wall St screeners to find additional high-quality undervalued or resilient stocks.

⚖️ Management must justify the valuation gap with upcoming earnings to avoid leaving margin for safety.

Bullish Signals
  • Total Revenues reached $48.3 billion in Full-Year 2024, representing a 7% increase from 2023.
  • Growth Portfolio Revenues grew 17% to $22.6 billion, indicating robust performance of newer products.
  • The stock shows positive momentum with a 90-day share price return of 8.77% and a year-to-date return of 11.17%.
  • Analysts imply the stock is undervalued with a fair value estimate of $65.00 versus the recent close of $59.43, suggesting an upside potential.
  • Non-GAAP EPS remains positive at $1.15, demonstrating underlying earnings power despite GAAP headwinds from restructuring charges.
  • Current P/E of 17.2x is below peer average of 19.8x and significantly below a fair ratio of 24.2x, indicating room for re-rating.
  • The company has a strong growth portfolio contributing over 45% of total revenues with the 17% year-over-year expansion.
Risk Factors
  • The company reported a GAAP loss per share of $(4.41) in 2024, down significantly from earnings of $3.86 in 2023.
  • Non-GAAP EPS fell sharply to $1.15 in 2024, compared to $7.51 the previous year.
  • Total revenue is projected to decline from 2024 levels when moving into 2025 projections.
  • The company faces risks related to successfully executing its planned US$2 billion cost savings program.
Full Analysis
Bristol-Myers Squibb (BMY) shares recently closed at $59.43, displaying mixed returns across various short-term and long-term periods including a 1-day gain of 0.83%, a 7-day rise of 2.27%, and a 90-day increase of 8.77%. However, the longer-term outlook presents a more tempered picture with a year-to-date return of 11.17% and a one-year total shareholder return of 6.00%, while the five-year total shareholder return stands at 14.28%. The current valuation analysis suggests the stock is trading at an intrinsic value estimate implying a discount of approximately 51%, leading to a fair value estimate of $65.00 according to the featured narrative, which characterizes the shares as modestly undervalued. Financial highlights for Full-Year 2024 reveal that total revenues reached $48.3 billion, marking a 7% increase from 2023. Despite this revenue growth, GAAP losses widened significantly, with loss per share reporting at $(4.41) compared to earnings of $3.86 in 2023. Conversely, non-GAAP EPS was reported at $1.15, down from $7.51 in the prior year. The growth portfolio demonstrated robust performance with revenues of $22.6 billion, representing a 17% increase, which underpins the narrative's focus on future earnings power and margin recovery assumptions rather than headline GAAP figures. Valuation metrics indicate that BMY currently trades at a P/E ratio of 17.2x, positioning it slightly above the US pharmaceuticals average of 16.9x but below both the peer average of 19.8x and a fair ratio of 24.2x. The article highlights potential risks such as a possible decline from 2024 revenue guidance to 2025 projections and execution challenges regarding the planned US$2 billion cost savings program. Investors are encouraged to weigh these risks against rewards including the company's resilience, growth portfolio strength, and the possibility of market re-rating, though Simply Wall St clarizes that this analysis is general in nature based on historical data and forecasts rather than specific financial advice.