Bristol Myers: Legacy Portfolio Faces Generic Challenges Amid Growth in Opdivo and Reblozyl Sales

Bristol Myers (BMY) shares have lost 19.2% in the past six months, underperforming the industry and S&P 500 Index. The company's legacy drugs face generic challenges and the outlook for 2025 has disappointed investors. However, BMY's growth portfolio, which includes Opdivo, Reblozyl, and other drugs, continues to maintain momentum, with Opdivo sales expected to deliver mid to high-single-digit growth for the full year.

Bristol-Myers Squibb (BMY) shares have underperformed the broader market and industry over the past six months, with a 19.2% decline Bristol-Myers Squibb: Growth Portfolio Surpasses Legacy, Driving Oncology And Immunology Leadership^[1]. The company's legacy drugs face generic challenges, and the outlook for 2025 has disappointed investors. However, BMY's growth portfolio, which includes Opdivo, Reblozyl, and other innovative drugs, continues to maintain momentum. In Q2 2025, the growth portfolio accounted for $6.6 billion in revenue, up 18% year-over-year, surpassing the legacy segment on the top line .

The company's forward P/E ratio of 7.26 is significantly lower than the industry average of 18.09, indicating limited downside and potential for a rebound . Despite the revenue setback from legacy blockbusters, the growth portfolio sales increased 17% year-over-year, suggesting a turnaround may be near. The oncology segment, driven by Opdivo and Yervoy, reflected strong demand, with sales rising 7% and 16%, respectively .

BMY's Q2 2025 results indicate that the company is pivoting to an innovation-led growth portfolio, with strategic biotech partnerships potentially accelerating growth. The company's capital structure, heavily leveraged with $51 billion in total obligations, could benefit from expected interest rate cuts by the Federal Reserve .

Analysts expect a decline in both top and bottom lines over the next two years, but the company's strong cash flow and attractive dividend yield suggest it may be well-positioned for a turnaround. BMY's forward EPS estimate of $6.02 for FY2026 indicates a nearly double-digit decline year-over-year, but applying a 9x earnings multiple suggests the stock may be trading at a higher premium .

Risks include further decline in legacy blockbuster drug revenue and execution risk in the growth portfolio. However, the company's focus on renewing growth and strategic partnerships may mitigate these risks. Investors should closely monitor BMY's progress and potential turnaround, as the markets are forward-looking and may start pricing in a turnaround sooner than fundamentals significantly shift.

Bristol-Myers Squibb: Growth Portfolio Surpasses Legacy, Driving Oncology And Immunology Leadership^[1]: Seeking Alpha
: Bristol-Myers Squibb Investor Relations
: Seeking Alpha
: Bristol-Myers Squibb Investor Relations
: Seeking Alpha
: Seeking Alpha