Bristol-Myers Squibb Posts 3.2% Weekly Loss, Earnings Decline Continues

Bristol-Myers Squibb (BMY) shares have declined 32% over the past three years, compared to a 69% market return. The company's earnings have continued to decline, despite a healthy dividend. Analysts predict a negative future profit growth, and insiders have made significant purchases in the last year.

Bristol-Myers Squibb (BMY) has been a subject of interest for investors due to its recent performance and valuation metrics. Over the past three years, BMY shares have declined by 32%, compared to a 69% market return, raising questions about the company's future prospects. Despite this decline, the company has maintained a healthy dividend, which has been a source of comfort for some investors. Analysts predict a negative future profit growth, while insiders have shown confidence in the company by making significant purchases in the last year.

Looking at the company's recent earnings, BMY reported revenues of $12.27 billion in Q2 2025, which exceeded analysts' expectations by 7.8%. This positive earnings report has been met with a modest stock price increase of 2.6% since reporting, currently trading at $47.22. This performance aligns with the broader branded pharmaceutical industry, which reported a strong Q2 with revenues beating analysts' consensus estimates by 3.1%.

Valuation-wise, Bristol-Myers Squibb scores a 4 out of 6 on Simply Wall St's undervaluation checks, indicating a reasonable score in a market where bargains are hard to find. A Discounted Cash Flow (DCF) model estimates the company's intrinsic value at $141.36 per share, suggesting that the stock is 66.1% undervalued relative to its recent price of $47.92 [1].

The company's Price-to-Earnings (PE) ratio of 19.3x is roughly in line with its industry average of 19.6x and its direct peer group average of 18.2x. However, a more nuanced valuation approach, such as the Simply Wall St's Fair Ratio, suggests that Bristol-Myers Squibb's appropriate PE should be 23.4x. This discrepancy indicates that the stock may be cheaper than what would be reasonable if the company's expected growth and risk profile are taken into account [1].

In conclusion, Bristol-Myers Squibb's recent earnings report and valuation metrics suggest that the stock may be undervalued. However, investors should consider the company's future growth prospects and the potential impact of patent cliffs and regulatory scrutiny on its long-term performance. As always, it's essential to conduct thorough research and consider multiple factors before making investment decisions.

References:
[1] https://finance.yahoo.com/news/revisit-bristol-myers-squibb-amid-102423819.html
[2] https://finance.yahoo.com/news/branded-pharmaceuticals-stocks-q2-recap-033220483.html