Wells Fargo has adjusted its price target for Bristol Myers (BMY, Financial), reducing it from $62 to $53 while maintaining an Equal Weight rating on the company's shares. The adjustment reflects ongoing concerns regarding the pharmaceutical giant's future growth prospects.
The firm's analysis indicates that Bristol Myers is grappling with a slowing growth portfolio, compounded by an accelerating decline in its legacy products. Recent setbacks in clinical trials further highlight the company's need to bolster its external pipeline, according to Wells Fargo.
These developments underscore the challenges Bristol Myers faces in maintaining its growth trajectory, necessitating strategic moves to enhance its product offerings and counteract existing declines.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 21 analysts, the average target price for Bristol-Myers Squibb Co (BMY, Financial) is $56.26 with a high estimate of $68.00 and a low estimate of $33.10. The average target implies an upside of 15.56% from the current price of $48.69. More detailed estimate data can be found on the Bristol-Myers Squibb Co (BMY) Forecast page.
Based on the consensus recommendation from 28 brokerage firms, Bristol-Myers Squibb Co's (BMY, Financial) average brokerage recommendation is currently 2.7, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Bristol-Myers Squibb Co (BMY, Financial) in one year is $63.05, suggesting a upside of 29.49% from the current price of $48.69. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Bristol-Myers Squibb Co (BMY) Summary page.
BMY Key Business Developments
Release Date: February 06, 2025
- Fourth Quarter Revenue: Approximately $12.3 billion, a 9% increase driven by volume growth and higher inventory levels.
- Growth Portfolio Sales: Increased by 23%, representing slightly more than half of total revenue.
- Key Brand Performance: Significant growth in Reblozyl, KENZO, and Opdulag.
- Full Year Revenue Guidance for 2025: Estimated at approximately $45.5 billion.
- Non-GAAP Earnings Per Share Guidance for 2025: Expected to be in the range of $6.55 to $6.85.
- Gross Margin: Declined by about 240 basis points in the fourth quarter due to product mix.
- Operating Expenses: Increased by approximately 8%, driven by R&D investments.
- Cost Savings Achieved in 2024: Approximately $1.1 billion realized from a targeted $1.5 billion.
- Expanded Cost Savings Program: Additional $2 billion in savings identified, with $1 billion expected in 2025.
- Cash Flow from Operations: Approximately $4.4 billion in the fourth quarter.
- Cash and Equivalents: Approximately $11.2 billion as of December 31, 2024.
- Debt Repayment: Approximately $6 billion repaid out of a $10 billion commitment.
- Dividend Commitment: 2025 marks the 93rd consecutive year of dividend payments.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Bristol-Myers Squibb Co (BMY, Financial) achieved double-digit revenue growth in 2024, driven by key products like BREYANZI, Krazati, Reblozyl, and Opdivo.
- The company successfully launched Cobenfy, a novel treatment for schizophrenia, marking a significant milestone in their neuroscience portfolio.
- Operational excellence and financial discipline led to significant cost savings, with $1.5 billion in savings targeted and most achieved in 2024.
- Bristol-Myers Squibb Co (BMY) accelerated several late-stage pipeline programs, including CEMZIOS and the ADEPT-2 study, ahead of schedule.
- The company has identified an additional $2 billion in savings, with $1 billion expected to be realized in 2025, enhancing financial flexibility.
Negative Points
- Bristol-Myers Squibb Co (BMY) faces near-term revenue impact due to generic competition across multiple products, including Revlimid and POMALYST.
- The company anticipates a decline in the legacy portfolio by 18% to 20% in 2025 due to loss of exclusivity and foreign exchange headwinds.
- Gross margin declined by 240 basis points in the fourth quarter of 2024, primarily due to product mix.
- The company is experiencing increased gross-to-net pressures from Medicare Part D redesign, impacting products like Eliquis.
- There are concerns about the potential impact of the Inflation Reduction Act (IRA) on pricing and market dynamics for key products.
