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Bristol-Myers Squibb Co BMY

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Morningstar’s Analysis

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While We Remain Skeptical of Bristol’s Robust Long-Term Guidance, the Stock Looks Undervalued

Damien Conover, CFA Sector Director

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.

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Company Profile

Business Description

Bristol-Myers Squibb discovers, develops, and markets drugs for various therapeutic areas, such as cardiovascular, oncology, and immune disorders. A key focus for Bristol is immuno-oncology, where the firm is a leader in drug development. Unlike some of its more diversified peers, Bristol has exited several nonpharmaceutical businesses to focus on branded specialty drugs, which tend to support strong pricing power.

430 E. 29th Street, 14th Floor
New York, NY, 10016
T +1 212 546-4000
Sector Healthcare
Industry Drug Manufacturers - General
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type High Yield
Employees 30,250