BMY
BMY
Accumulate 2026-03-19
Model
DCF
Price at Report
$59.37
Base IV
$66.33
Bear IV
$31.32
Bull IV
$135.62
Entry Zone: 33-61 · Sell Above: 115
Bore Family Office
Valuation Report — Bristol-Myers Squibb Company (BMY) • March 19, 2026
Unlevered DCF (FCFF @ WACC) • Discount Rate: 8.30% • Current Price: $59.37
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Bristol-Myers Squibb is a global biopharmaceutical company with a $121B market cap, focused on oncology, hematology, immunology, and cardiovascular therapeutics. The company has undergone a major portfolio transformation following its $74B acquisition of Celgene (2019) and $14B acquisition of Karuna Therapeutics (2023), building what it calls the "Growth Portfolio" to replace declining legacy revenues from Revlimid and the approaching Eliquis patent cliff.
The Growth Portfolio (Opdivo, Reblozyl, Camzyos, Cobenfy, sotyktu, and others) now represents ~53% of total revenue, up from 39% a year ago, and grew 15% YoY in Q4 2025 to $7.4B. The critical question for BMY is whether these assets can fully offset the ~$15-18B Eliquis/Revlimid cliff by 2029-2030. Management guided FY2026 revenue of $46-47.5B and expects six potential registrational readouts in 2026.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Growth Portfolio | $24,900M | 52% | +21.0% | — | Opdivo ($9.5B), Reblozyl ($3.8B), Camzyos ($1.2B), Cobenfy ($0.4B), sotyktu, others |
| Eliquis | $12,200M | 25% | +2.0% | — | Blood thinner; US patent expiry 2028, EU 2026; ~$12B peak revenue at risk |
| Revlimid | $4,800M | 10% | -25.0% | — | Multiple myeloma; generics entered 2022; declining ~25%/yr toward zero |
| Other Legacy | $6,294M | 13% | -5.0% | — | Pomalyst, Sprycel, other mature brands in managed decline |
| Blended Growth Rate | — | 100% | +8.3% | — | Weighted avg across segments |
🔍 Quality Scorecard
| Metric | Value | Assessment |
|---|---|---|
| ROIC | 10.7% | 8–12% adequate |
| FCF Margin | 26.7% | ≥10% strong |
| Debt / EBITDA | 3.2x | 2–4x moderate |
| Revenue Trend | Mixed | 3-year directional trend |
| FCF Margin Trend | Stable (±1pp) | Directional margin trajectory |
| Analyst Revisions | Upward revisions | Last 90 days consensus direction |
✅ Quality profile supports the valuation
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $46,385 | $46,159 | $45,006 | $48,300 | $48,194 |
| EBITDA ($M) | $18,064 | $18,565 | $17,042 | $2,114 | $14,013 |
| Operating Income ($M) | $7,378 | $8,289 | $7,282 | $-7,486 | $10,002 |
| Net Income ($M) | $6,994 | $6,327 | $8,025 | $-8,948 | $7,054 |
| EPS (diluted) | $3.12 | $2.95 | $3.86 | $-4.41 | $3.46 |
| Free Cash Flow ($M) | $15,234 | $11,948 | $12,651 | $13,942 | $12,845 |
| Annual DPS | $2.040 | $2.280 | $2.400 | $2.400 | $2.480 |
| Total Debt ($M) | $44,553 | $39,320 | $39,772 | $49,649 | $45,111 |
| Rev YoY Growth | — | -0.5% | -2.5% | +7.3% | -0.2% |
| Gross Margin | 78.6% | 78.0% | 76.2% | 71.1% | 71.1% |
| EBITDA Margin | 38.9% | 40.2% | 37.9% | 4.4% | 29.1% |
| Operating Margin | 15.9% | 18.0% | 16.2% | -15.5% | 20.8% |
| Net Margin | 15.1% | 13.7% | 17.8% | -18.5% | 14.6% |
⚙️ WACC Build (DCF)
| Input | Value | Notes |
|---|---|---|
| Risk-Free Rate (Rf) | 4.30% | 10-yr US Treasury yield |
| Beta (β) | 0.900 | Market beta (Finnhub) |
| Equity Risk Premium (ERP) | 5.5% | Damodaran US ERP |
| Cost of Equity (Ke) | 10.05% | Ke = Rf + β × ERP |
| Pre-Tax Cost of Debt | 4.50% | Interest exp / gross debt |
| After-Tax Cost of Debt (Kd) | 3.60% | × (1 − 20%) |
| Weight Equity (We) | 72.8% | Mkt cap $0.0B |
| Weight Debt (Wd) | 27.2% | Gross debt $0.0B |
| WACC | 8.30% | DCF discount rate |
📈 DCF Scenarios
$31
🔴 Bear
$66
📊 Base
$136
🚀 Bull
$59.37
Current Price
$62
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | WACC | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | -6.0% | 0.0% | 2.0% | 9.80% | $31 | ▼47.2% |
| 📊 Base | -3.0% | 2.0% | 2.5% | 8.30% | $66 | ▲11.7% |
| 🚀 Bull | 0.0% | 4.0% | 3.0% | 7.30% | $136 | ▲128.4% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: -6.0% | Stage 2: 0.0% | Terminal: 2.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $10.80B | $9.84B | $9.84B |
| Year 2 ✦ | Stage 1 | $9.50B | $7.88B | $17.72B |
| Year 3 ✦ | Stage 1 | $8.60B | $6.50B | $24.21B |
| Year 4 ✦ | Stage 1 | $8.20B | $5.64B | $29.85B |
| Year 5 ✦ | Stage 1 | $8.40B | $5.26B | $35.12B |
| Year 6 | Stage 2 | $8.40B | $4.79B | $39.91B |
| Year 7 | Stage 2 | $8.40B | $4.37B | $44.28B |
| Year 8 | Stage 2 | $8.40B | $3.98B | $48.25B |
| Year 9 | Stage 2 | $8.40B | $3.62B | $51.87B |
| Year 10 | Stage 2 | $8.40B | $3.30B | $55.17B |
| Terminal | — | TV=$109.8B | PV(TV)=$43.1B (44% of EV) | EV=$98.3B |
| Intrinsic Value | — | — | EV $98.3B − Net Debt → Equity / Shares | $31 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (9.80%) to get its present value. After Year 10, FCF grows at the terminal rate (2.0%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $109.8B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $43.1B). Enterprise Value = PV of FCFs ($55.2B) + PV of TV ($43.1B) = $98.3B. Subtracting net debt gives equity value of $63.9B, divided by shares outstanding = $31 per share.
Base Scenario
Stage 1: -3.0% | Stage 2: 2.0% | Terminal: 2.5%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $12.40B | $11.45B | $11.45B |
| Year 2 ✦ | Stage 1 | $11.70B | $9.98B | $21.43B |
| Year 3 ✦ | Stage 1 | $10.60B | $8.34B | $29.77B |
| Year 4 ✦ | Stage 1 | $10.10B | $7.34B | $37.11B |
| Year 5 ✦ | Stage 1 | $10.80B | $7.25B | $44.36B |
| Year 6 | Stage 2 | $11.02B | $6.83B | $51.19B |
| Year 7 | Stage 2 | $11.24B | $6.43B | $57.62B |
| Year 8 | Stage 2 | $11.46B | $6.06B | $63.67B |
| Year 9 | Stage 2 | $11.69B | $5.70B | $69.38B |
| Year 10 | Stage 2 | $11.92B | $5.37B | $74.75B |
| Terminal | — | TV=$210.7B | PV(TV)=$94.9B (56% of EV) | EV=$169.7B |
| Intrinsic Value | — | — | EV $169.7B − Net Debt → Equity / Shares | $66 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (8.30%) to get its present value. After Year 10, FCF grows at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $210.7B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $94.9B). Enterprise Value = PV of FCFs ($74.8B) + PV of TV ($94.9B) = $169.7B. Subtracting net debt gives equity value of $135.2B, divided by shares outstanding = $66 per share.
✦ Year-by-year analyst consensus FCF estimates (Base scenario)
Bull Scenario
Stage 1: 0.0% | Stage 2: 4.0% | Terminal: 3.0%
| Period | Stage | FCFF | PV of FCFF | Cumulative EV |
|---|---|---|---|---|
| Year 1 ✦ | Stage 1 | $13.50B | $12.58B | $12.58B |
| Year 2 ✦ | Stage 1 | $13.80B | $11.99B | $24.57B |
| Year 3 ✦ | Stage 1 | $13.20B | $10.69B | $35.25B |
| Year 4 ✦ | Stage 1 | $13.50B | $10.18B | $45.44B |
| Year 5 ✦ | Stage 1 | $14.50B | $10.19B | $55.63B |
| Year 6 | Stage 2 | $15.08B | $9.88B | $65.51B |
| Year 7 | Stage 2 | $15.68B | $9.58B | $75.09B |
| Year 8 | Stage 2 | $16.31B | $9.28B | $84.37B |
| Year 9 | Stage 2 | $16.96B | $9.00B | $93.37B |
| Year 10 | Stage 2 | $17.64B | $8.72B | $102.09B |
| Terminal | — | TV=$422.6B | PV(TV)=$208.9B (67% of EV) | EV=$311.0B |
| Intrinsic Value | — | — | EV $311.0B − Net Debt → Equity / Shares | $136 |
How the price per share is derived: Each year's projected free cash flow is discounted back at WACC (7.30%) to get its present value. After Year 10, FCF grows at the terminal rate (3.0%) in perpetuity — the Gordon Growth formula gives a terminal value of FCF11 / (WACC − gT) = $422.6B. That terminal value is discounted back 10 years to today's dollars (PV of TV = $208.9B). Enterprise Value = PV of FCFs ($102.1B) + PV of TV ($208.9B) = $311.0B. Subtracting net debt gives equity value of $276.5B, divided by shares outstanding = $136 per share.
🔲 Sensitivity Table
| WACC \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 6.3% | $93 | $102 | $112 | $126 | $145 |
| 6.8% | $83 | $90 | $98 | $108 | $121 |
| 7.3% | $75 | $80 | $86 | $94 | $103 |
| 7.8% | $68 | $72 | $77 | $83 | $90 |
| 8.3% | $61 | $65 | $69 | $74 | $79 |
| 8.8% | $56 | $59 | $62 | $66 | $71 |
| 9.3% | $52 | $54 | $57 | $60 | $63 |
| 9.8% | $48 | $49 | $52 | $54 | $57 |
| 10.3% | $44 | $46 | $48 | $50 | $52 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
🏦 Comparable Valuation
| Company | P/E (Fwd) | EV/EBITDA | Div Yield | FCF Margin | Note |
|---|---|---|---|---|---|
| BMY (current) | 9.4x | 11.2x | 4.22% | 26.7% | Cheapest on P/E; patent cliff discount |
| BMY (5yr avg) | ~15x | ~10x | ~3.5% | 28% | Trading well below own historical avg |
| ABBV (AbbVie) | 14.8x | 12.5x | 3.5% | 22% | Post-Humira cliff recovery; diversified |
| MRK (Merck) | 12.5x | 13.1x | 3.2% | 24% | Keytruda-dependent; cliff ~2028 |
| PFE (Pfizer) | 9.8x | 9.5x | 6.8% | 15% | Post-COVID collapse; deep value |
| JNJ (J&J) | 15.2x | 13.8x | 3.1% | 22% | Premium diversified; defensive |
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $2.520 |
| Current Yield | 4.22% |
| Consecutive Growth Years | 19 |
| 1-yr DPS CAGR | +2.5% |
| 3-yr DPS CAGR | +3.5% |
| 5-yr DPS CAGR | +4.4% |
| 10-yr DPS CAGR | +3.5% |
| Payout Ratio (DPS/EPS) | 72.3% |
| FCF Payout Ratio | 40.0% |
| Sustainability Verdict | Safe |
BMY's dividend is well-covered with a FCF payout ratio of just 40% ($5.14B dividends vs $12.8B FCF). Even in the Bear case with FCF declining to ~$8B, the payout ratio would remain under 65%. The 19-year growth streak should continue — BMY has ample room for 3-5% annual DPS increases even through the patent cliff trough.
The dividend is not at risk from the Eliquis patent cliff. FCF would need to decline below $5.5B before dividend coverage becomes a concern — that would require a revenue decline of 40%+ from current levels, well beyond even our Bear case.
The dividend is not at risk from the Eliquis patent cliff. FCF would need to decline below $5.5B before dividend coverage becomes a concern — that would require a revenue decline of 40%+ from current levels, well beyond even our Bear case.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $3.12 | — | — | — | Actual |
| 2022 | $2.95 | — | — | — | Actual |
| 2023 | $3.86 | — | — | — | Actual |
| 2024 | $-4.41 | — | — | — | Actual |
| 2025 | $3.46 | — | — | — | Actual |
| 2026 | $5.93 | $6.33 | $6.68 | 31 | Estimate |
| 2027 | $5.31 | $6.19 | $7.20 | 28 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $46.4B | — | — | — | Actual |
| 2022 | $46.2B | — | — | — | Actual |
| 2023 | $45.0B | — | — | — | Actual |
| 2024 | $48.3B | — | — | — | Actual |
| 2025 | $48.2B | — | — | — | Actual |
| 2026 | $45.3B | $47.6B | $49.9B | 31 | Estimate |
| 2027 | $42.8B | $46.6B | $49.7B | 28 | Estimate |
(c) Individual Analyst Price Targets
Consensus: Avg $61.81 | Range $37–$75
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| David Amsellem | Piper Sandler | Buy | $75 | +26.3% |
| Emily Field | Barclays | Buy | $75 | +26.3% |
| Geoff Meacham | Citigroup | Hold | $64 | +7.8% |
| Rajesh Kumar | HSBC | Hold | $60 | +1.1% |
| Trung Huynh | RBC Capital | Hold | $60 | +1.1% |
| Chris Schott | JPMorgan | Neutral | $58 | -2.3% |
| Terence Flynn | Morgan Stanley | Equal-Weight | $55 | -7.4% |
| Vamil Divan | Guggenheim | Neutral | $52 | -12.4% |
(d) Earnings Surprise History
| Quarter | EPS Act vs Est | EPS Beat/Miss | Rev Act vs Est | Rev Beat/Miss | Guidance |
|---|---|---|---|---|---|
| Q4 2025 | $1.26 vs $1.12 | +$0.14 ✅ | $12.5B vs $12.2B | +$0.3B ✅ | FY2026 rev $46-47.5B |
| Q3 2025 | $1.80 vs $1.55 | +$0.25 ✅ | $12.9B vs $11.9B | +$1.0B ✅ | Raised FY2025 guidance |
| Q2 2025 | $2.07 vs $1.63 | +$0.44 ✅ | $12.2B vs $11.6B | +$0.7B ✅ | Raised FY2025 rev guidance |
| Q1 2025 | $1.44 vs $1.37 | +$0.07 ✅ | $11.2B vs $11.1B | +$0.1B ✅ | Maintained FY2025 guidance |
💡 Investment Thesis
- Growth Portfolio Momentum: The Growth Portfolio hit 53% of revenue in Q4 2025 and is growing 15-21% YoY. Opdivo ($9.5B, expanding into adjuvant/neoadjuvant settings), Reblozyl ($3.8B, MDS/beta-thalassemia), and Camzyos ($1.2B, hypertrophic cardiomyopathy) are scaling rapidly. This portfolio alone is larger than many standalone biopharma companies.
- Pipeline Optionality: Six registrational readouts expected in 2026 including pivotal data for sotyktu in lupus and Cobenfy in Alzheimer's psychosis. Milvexian (Factor XIa inhibitor) could be a $4B+ drug in anticoagulation. These catalysts provide meaningful upside not fully priced into the stock.
- Attractive Yield + Valuation: At 4.2% yield, 17x P/E, and 12x P/FCF, BMY trades at a discount to pharma peers (LLY 55x, ABBV 25x, MRK 18x) with a 19-year dividend growth streak and $12.8B in annual FCF.
- Debt Paydown: Total debt declined from $49.6B to $45.1B in FY2025, with management committed to investment-grade credit and deleveraging.
- Key Risk — Eliquis Cliff: Eliquis represents ~$12B revenue (~25% of total) with US patent expiry in 2028. Generic erosion could be 50-70% within 18 months of LOE. If Growth Portfolio underperforms, BMY could see a revenue hole of $5-8B in 2029-2030.
⚖️ DCF Verdict: Accumulate — Bristol-Myers Squibb Company (BMY)
Current price: $59.37 | Analyst Avg PT: $61.81
$31
🔴 Bear
$66
📊 Base
$136
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$61 | Begin position |
| Tier 2 — Add | ≤$49 | Add on weakness |
| Tier 3 — Full | ≤$33 | Full allocation |
| Sell Alert | ≥$115 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
BMY at $59 is a Hold with a Base DCF target of ~$62. The stock is fairly valued, trading at a modest discount to our Base IV and the analyst consensus PT ($61.81). The risk/reward is balanced: attractive yield and cash generation, but the Eliquis patent cliff creates significant near-term uncertainty about FCF trajectory.
The Growth Portfolio is impressive but needs to grow from $25B to $35B+ to fully offset Eliquis erosion — achievable but not guaranteed. The wide analyst PT range ($37-$75) reflects genuine disagreement about execution risk.
Action: Hold at current levels. Accumulate below $52 (near Bear case). Add aggressively below $45 on any sell-off. Trim above $70 approaching Bull territory. Key catalyst watch: Cobenfy launch trajectory and milvexian Phase 3 data in 2026.
🔧 Model Notes & Calibration
| Assumption | Rationale / Notes |
|---|---|
| FCF Base & Trajectory | FY2025 FCF $12,845M. BMY FCF expected to decline through 2028-2029 as Eliquis ($12B+ revenue) faces US generic entry in 2028. Base case models ~$10B trough FCF before Growth Portfolio recovery. Used analyst consensus revenue estimates × declining FCF margin for Bear/Base/Bull year 1-5 estimates. |
| WACC — Beta Adjustment | Raw Finnhub beta 0.29 is artificially low — reflects BMY's defensive/high-yield positioning and recent strong stock performance (+40% off 52wk lows). Adjusted to 0.90 to reflect: (1) pharma sector average beta ~0.85, (2) Eliquis patent cliff execution risk, (3) $45B debt load and high leverage. Added +0.80% patent cliff premium to CAPM Ke. Final Ke=10.05%, WACC=8.30%. |
| Patent Cliff Modeling | Eliquis ($12.2B FY2025 revenue) US patent expiry 2028 with generic entry expected mid-2028. Typical generic erosion for blockbuster drugs: 50-70% of branded revenue within 18 months of LOE. Modeled as -$4B to -$7B revenue impact by FY2030 depending on scenario. Revlimid already declining ~25%/yr with ~$4.8B remaining. |
| Sanity Check | Base IV ~$62 vs analyst consensus PT $61.81 — essentially aligned. Cross-checked: at current $59, implied WACC is ~8.5% using DCF reverse-engineering, which is consistent with our 8.30% WACC estimate. The market is pricing BMY at approximately fair value for a company navigating a major patent cliff. |
| FY2024 GAAP Anomaly | FY2024 reported a net loss of $(8.9B) due to $12.9B in non-cash impairment charges related to Karuna ($8B) and MyoKardia ($4.8B) acquisitions. EBITDA was only $2.1B vs normal $14-18B. These are one-time charges — FY2025 returned to normalized profitability. Analyst FY2026 EPS of $6.33 reflects true run-rate earnings power. |
Bore Family Office • Analysis generated by Lurch • Not investment advice.