Is Bristol-Myers Squibb Still An Undervalued Biopharma Play?

Bristol-Myers Squibb & Co. BMY is gearing up to announce its second-quarter 2025 earnings on July 31, with expectations for adjusted earnings of $1.585 per share on sales of $11.31 billion, according to data from Benzinga Pro.

While revenue and underlying earnings per share estimates for the current quarter and full-year 2025 have seen slight downward revisions, the U.S. pharma giant anticipates a low-single-digit percentage increase in total revenue for the later 2020s, primarily driven by updated assumptions for its cancer drug Yervoy.

The upcoming earnings call is expected to shed light on the performance of key products, future milestones, and the impact of U.S. drug pricing policies on the broader industry.

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Bank of America Securities (BofA) updated the company’s earnings model. For the second quarter, BofA’s total revenue estimates and EPS decline by more than 1%, with no significant changes; for 2025, there are no major changes, revenue and underlying earnings per share decrease by more than 1%.

For the later 2020s, total revenue estimates increase by a low-single-digit percentage, primarily related to updated loss-of-exclusivity assumptions for Yervoy. BofA maintains a Neutral rating and a price forecast of $56, using an 8x P/E multiple on updated 2025E EPS.

Analyst Tim Anderson notes that while Bristol-Myers Squibb has described the IRA’s Medicare Part D reform as “potentially net neutral across the portfolio,” certain products like Pomalyst, Revlimid, Camzyos, and Orencia (subcutaneous) are expected to have greater headwinds.

As the upcoming earnings call approaches, investors and analysts will be keenly focused on a few critical areas that will shape Bristol Myers Squibb’s narrative.

A significant portion of the discussion is anticipated to revolve around the evolving landscape of U.S. drug pricing policies. The specter of initiatives like the ‘most favored nation’ rule, alongside the potential imposition of pharma-specific tariffs under Section 232, casts a long shadow over the entire pharmaceutical industry, and Bristol Myers Squibb is certainly not immune to these systemic pressures.

Beyond these broader industry concerns, the call will undoubtedly provide crucial updates on the commercial performance and future potential of key products within the company’s portfolio, including Cobenfy, Camzyos, Reblozyl, and Breyanzi.

Their trajectory in the market will be a strong indicator of the company’s immediate revenue streams. Additionally, stakeholders will be eager to hear about upcoming milestones slated for 2025, which could provide insights into future product launches, regulatory decisions, or significant clinical trial readouts.

While the company navigates these operational and policy challenges, its valuation remains a talking point among analysts. As analyst Anderson points out, Bristol Myers Squibb “remains one of the cheaper companies in large-cap biopharma,” but it’s no longer unusually cheap. Its price-to-earnings ratio of 7 to 8 times expected 2025 earnings is now similar to peers like Pfizer Inc PFE, GSK Plc GSK, Biogen Inc BIIB, and Merck & Co. Inc MRK.

Despite this current valuation, the road ahead appears challenging. The company is bracing for several tough years, with an anticipated decline in earnings primarily driven by the relentless pressure from generic competition.

This looming threat to its established revenue streams means that achieving meaningful medium-term growth will be a significant hurdle for Bristol Myers Squibb to overcome.

Price Action: BMY stock is trading higher by 1.52% to $47.57 at last check Monday.

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