Why Bristol Myers Squibb Stock Didn’t Ride The Market Wave?
Bristol Myers Squibb stock (NYSE: BMY) has gained 7% this year, outperforming the S&P 500 which has declined 1%. BMS’s strong Q4 performance has helped drive its positive momentum. While markets broadly face pressure from new U.S. tariffs on Canada, Mexico, and China, investors are seeking defensive positions amid economic uncertainty. Our take on market crash risk right now has more details on how tariffs impact the broader markets.
Despite this recent strength, BMY stock remains down 8% when viewed over a longer timeframe from early 2023. This can primarily be attributed to:
- a 5% rise in the company’s revenue from $46.2 billion in 2022 to $48.3 billion now;
- a 6% fall in total shares outstanding to 2.0 billion; more than offset by:
- a 17% fall in P/S ratio to 2.5x now, versus 3.0x in 2022
We discuss these factors in the sections below. While BMY stock has had a poor run, if you want an upside with a smoother ride than an individual stock, consider the High-Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception.
Image by Damian Kaffenberger from Pixabay
Bridging the Gap: From Revlimid to Camzyos
Bristol Myers Squibb’s revenue faces challenges due to declining sales of legacy drugs like Revlimid. However, the strong performance of Eliquis, with over $13 billion in sales last year, provides a counterweight. While Eliquis sales are projected to grow in the near term, biosimilar competition looms, with its market exclusivity period ending in 2028. BMS anticipates its new cardiovascular drug, Camzyos, will offset the eventual Eliquis decline. Furthermore, BMS expects newer drugs, including Sotyktu, and Opdualag, to each exceed $1 billion in sales by 2026. To further boost growth, BMS has pursued strategic acquisitions, acquiring Mirati Therapeutics, RayzeBio, and Karuna Therapeutics. These acquisitions have expanded BMS’s pipeline to over 50 compounds, including the recently FDA-approved schizophrenia drug, Cobenfy, which has a potential peak sales estimate of over $7 billion.
Recent Share Buyback Trend
Since 2022, Bristol Myers Squibb has reduced its outstanding shares from 2.15 billion to 2.03 billion through $13 billion in share repurchases. While the company still has $5 billion authorized for buybacks as of December 31, 2024, no repurchases were made during 2024.
Valuation Pressures Amidst Revenue Transition
BMS is experiencing a period of valuation pressure despite increased revenues. This stems from a confluence of factors, primarily the declining sales of established blockbuster drugs and the anticipation of forthcoming generic competition for Eliquis. While the company’s new drug portfolio demonstrates promising growth, BMS itself forecasts a 6% revenue decline for the current year. Furthermore, we anticipate this downward trend to persist into 2026. Consequently, investors have assigned a lower valuation multiple to the stock.
Currently, at approximately $60 per share, BMS stock trades at 2.5 times its trailing revenues, slightly below its five-year average price-to-sales (P/S) ratio of 2.6. Based on our analysis, we estimate Bristol Myers Squibb’s valuation to be around $61 per share, aligning closely with the current market price.
While new drug approvals offer potential upside, the immediate financial outlook is dominated by the revenue impact of declining legacy drug sales. This short-term challenge appears to be overshadowing the long-term growth prospects of the company’s emerging pharmaceutical pipeline.
While BMY stock navigates lower sales and valuation, discover the potential of the High-Quality Portfolio, a curated list of 30 stocks that has consistently delivered superior returns compared to the S&P 500 over the past four years.
| Returns | Mar 2025 MTD [1] |
2025 YTD [1] |
2017-25 Total [2] |
| BMY Return | 0% | 7% | 35% |
| S&P 500 Return | -2% | -1% | 161% |
| Trefis Reinforced Value Portfolio | -2% | -4% | 658% |
[1] Returns as of 3/4/2025
[2] Cumulative total returns since the end of 2016
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