Analyst Note| Damien Conover, CFA |
In tandem with presenting at a healthcare conference, Bristol-Myers Squibb issued 2022 guidance and updated its long-term outlook, although this doesn’t have a major impact on our fair value estimate. Despite our forecast falling below management’s long-term outlook, we still view the stock as moderately undervalued, suggesting a favorable margin of error in supporting our undervalued call. While we believe the pipeline is strong enough to support the firm’s wide moat, we forecast a significant decline in sales from 2025 to 2029, in contrast to management’s long-term view of growth over this time. We expect the patent losses (Opdivo and Eliquis) will be too challenging to support growth between 2025 and 2029.