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On Friday, BofA Securities updated its outlook on Bristol-Myers Squibb Co. (NYSE:BMY), increasing the price target to $56 from the previous $54 while maintaining a Neutral rating. The firm’s analyst noted that although Bristol-Myers Squibb is considered one of the more affordable companies within the large-cap biopharmaceutical sector, it no longer stands out in terms of valuation. According to InvestingPro data, BMY currently trades at a P/E ratio of 18.17x, while its RSI suggests the stock is in oversold territory. The company’s price-to-earnings (P/E) ratio is estimated to be between 7 and 8 times its projected 2025 earnings per share (EPS), which is similar to peers such as Pfizer (NYSE:PFE), GSK, Biogen (NASDAQ:BIIB), and now Merck (NSE:PROR).
The analyst highlighted that Bristol-Myers Squibb is approaching a period of decreased earnings over the next few years due to the pressures of generic competition, which could pose challenges for growth in the intermediate term. This earnings landscape contributes to the Neutral rating previously detailed in a December 10 report. Despite these challenges, the company maintains strong fundamentals with a GOOD financial health score from InvestingPro, generating $47.64B in revenue and offering a substantial 5.09% dividend yield.
The price target adjustment to $56 is based on an unchanged P/E multiple of 8 times the new estimated EPS for the year 2025. The firm’s analysis suggests that while Bristol-Myers Squibb’s valuation aligns with other companies in its class, the potential for near-term upside may be limited due to the anticipated earnings decline.
Bristol-Myers Squibb’s stock performance and investor sentiment will likely continue to be influenced by its growth profile and how it navigates the forthcoming generic pressures. The updated price target reflects a slight increase in the expected future performance of the company, while the neutral stance indicates a cautious view of its prospects amidst the competitive and challenging market conditions. Notably, InvestingPro analysis indicates BMY is currently undervalued, with a strong free cash flow yield of 14%. For deeper insights into BMY’s valuation and 12+ additional ProTips, explore the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Bristol-Myers Squibb reported its financial results for the first quarter of 2025, exceeding analysts’ expectations. The company posted earnings per share of $1.80, surpassing the projected $1.52, and achieved revenue of $11.2 billion, higher than the anticipated $10.68 billion. This performance was driven by a robust growth portfolio, particularly in the immuno-oncology and hematology segments. Despite these positive results, the company’s stock experienced a minor decline, reflecting cautious investor sentiment. Additionally, Bristol-Myers Squibb raised its full-year revenue guidance to a range of $45.8-$46.8 billion. The company also continues to focus on its strategic initiatives, including pipeline advancements and operational excellence. Analyst discussions highlighted the importance of new product launches, such as COBENFY for schizophrenia, and ongoing strategic priorities in business development.
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