Market Cap $131.1 billion 2020E 2021E 2022E
Price as of 04/07/20 $56.88 EPS 6.15 7.39 7.98
Dividend 2.97% P/E 9.4x 7.8x 7.3x
Avg Price Target $75.00
52-week Range $42.48 – $68.34



Bristol-Meyers Squibb (BMY) is a pharmaceutical company that has a diverse drug portfolio with a specific focus in immuno-oncology.

Within the portfolio are a few key drugs: Revlimid for multiple myeloma; Eliquis for stroke prevention and other venous disorders; Opdivo for anti-cancer treatments; Ozanimod for multiple sclerosis; and Orencia for rheumatoid and other types of arthritis. Bristol-Meyers has been successful at releasing drugs not just for one illness, or indication. Once the initial revenue stream arrives, new indications are added to drug research to expand the uses for patent protection on the drug. This method helps to create revenue that helps support the ongoing research of other indications the drug will help.

Bristol-Meyers acquired Celgene in 2019 and with it acquired the rights to three key drugs that Celgene was developing — including previously mentioned Ozanimod. The acquisition provides greater product diversification so that when inevitable patent expirations arrive, the increased competition for the patent-expired products has less materially detrimental results to the company’s revenue. The acquisition of Celgene provides adequate growth catalysts for the combined company without creating competition across drugs owned by the newly formed conglomerate.


  • We expect the purchase of Celgene will add to BMY’s multiple by enhancing earnings in the near-to-mid term.  The company now has a rich pipeline of drugs for diverse indications with high likelihood of success in clinical trials.
  • Following Bristol-Meyers’ guidance through 2022, BMY is expecting earnings growth of 29.7% in the next 2 years.
  • Including data from the recent acquisition, a variety of oncology drugs now make up approximately 60% of total revenues. Oncology drugs brought in around $13 billion for BMY in 2019, and that number is expected to increase by 15% for 2020.
  • As a consensus, analysts are assuming that a fair value for BMY is 11x earnings.  Assuming future guidance regarding business does not change, we see a potential price target in the next two years at 54% upside.


  • Clinical trial setbacks. BMY has a solid pipeline where we see most of the growth catalyst into the next few years. It would be a risk to the future financial growth of the company if clinical trials yield less effective results than originally estimated. After clinical trials, the data is sent to the FDA which may need to delay approvals if more information is needed or may deny the approval altogether. Any of the previously mentioned scenarios would have material impact on the forward-looking estimates for the company.
  • Pricing pressure & reimbursements. Election-year political uncertainty is a risk to the future reimbursement received from drug savings programs. Pricing pressure amongst all big pharma companies is another industry-wide risk.

Prepared by:
Sally Whitmore, Research Analyst
Oarsman Capital, Inc.
Factual material is obtained from sources believed to be reliable and is provided without warranties of any kind. Oarsman Capital, Inc. is not responsible for any errors or omissions herein