24Q4 net revenue rose 7.5% to $12.3 billion, with gains in Eliquis and the growth portfolio more than offsetting LOE-related declines in Revlimid, Pomalyst, Sprycel and Abraxane. Growth portfolio net revenues rose 9.5% sequentially and 29% YOY. Gross margin fell from 76.1% to 61.0% because of intangible asset impairments and product mix. Non-GAAP gross margin declined 240 bp to 76.0%. Marketing, selling & administrative expenses were flat. R&D expenses rose 29% due to acquisitions and IPRD impairment charges. Thus, GAAP EPS was $0.04, below 23Q4’s $0.83 and my estimate of $0.54. Non-GAAP EPS of $1.67 exceeded last year’s $1.63 and my estimate of $1.44.
Management’s 2025 guidance anticipates total revenues of $45.5 billion, down $2.8 billion or 5.5% from 2024. Loss of exclusivity on several drugs, most notably Revlimid, whose sales are expected to fall $2.2-$2.8 billion or 57%-62%, will be partially offset by sales gains in the growth portfolio. Non-GAAP gross margin is expected drop 240 bp to 72.9%. Non-GAAP operating costs are forecast at $16 billion, down from $17.8 billion in 2024, driven in large part by an expanded strategic productivity initiative which is expected to deliver $2 billion in additional annual cost savings by the end of 2027. Management anticipates 2025 non-GAAP EPS of $6.55-$6.85, below my previous estimate of $7.00.
My revised 2025 projections are mostly in line with guidance. They show revenues of $45.8 billion, GAAP EPS of $4.98 and non-GAAP EPS of $6.61. For 2026, I project revenues of $47.4 billion, up 3.5%, GAAP EPS of $6.16 per share and non-GAAP EPS of $6.99. My projections do not anticipate any acquisitions or intangible asset or IPRD impairment charges. The 24Q4 impairment charges look a bit like housecleaning, which may help to avoid further charges in 2025.
Since my last report, BMY’s stock has slightly outperformed the S&P 500, with a 6.5% total return vs. 4.9%. Against the NYSE ARCA Pharmaceutical Index ($DRG), the stock is up 5.4% on price vs. $DRG’s 1.1%. Although the stock has recovered 2/3 of what it lost after 24Q4 earnings were announced on February 6, today’s “shooting star” candlestick pattern, with a opening and closing prices near the day’s low, may portend a second leg of the recent downtrend.
Despite the near-term downside risk and based upon 2025 guidance, my 2026 projections, BMY’s pipeline progress and the stock’s advance since my last report, I am raising my price target from $61 from $64. That equates to a one-year forward multiple of 10.4 times projected 2026 GAAP EPS of $6.16 or 9.2 times projected non-GAAP EPS of $6.99. My assumed non-GAAP multiple is below the peer group average of 11.5 times, so the stock has recovery potential beyond my $64 price target. Along with its 4.3% dividend yield, the price target represents a potential total return of 14% from today’s closing price of $58.21. Accordingly, I am maintaining my performance rating of “2” (Outperform).
This is a summary of my recent update report on Bristol-Myers Squibb Co. (BMY). To obtain a copy of the report, please reach out to me using the contact information provided below.
March 25, 2025 (Report published on February 25, 2025.)
Stephen P. Percoco
Lark Research
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Linden, New Jersey 07036
(908) 975-0250
admin@larkresearch.com
© 2015-2025 by Stephen P. Percoco, Lark Research. All rights reserved.
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