25Q1 net revenue decreased 5.6% to $11.2 billion, as declines in Eliquis and Revlimid were only partially offset by an increase in Opdivo. BMY’s growth portfolio posted a 16.1% YOY revenue increase, the slowest in a year; while the legacy portfolio suffered a 20.3% decline. Yet, adjusted gross margin rose 240 bp to 73.1%, due mostly to product mix; marketing, selling & administrative (MS&A) expenses fell 33%; and R&D expense dropped 16%, due to strategic initiatives and lower acquisition-related costs (including lower stock cash settlements). IPRD fell from $12.9 billion last year to $188 million, due to the non-repeat of 24Q1’s $12.1 billion Karuna acquisition write-off. Thus, GAAP EPS was $1.20, reversing 24Q1’s $5.89 loss, and non-GAAP EPS was $1.80 vs. a loss of $4.40. I had anticipated revenue of $11.6 billion, GAAP EPS of $1.09 and non-GAAP EPS of $1.62. Net revenue fell short of my estimate (but exceeded the consensus revenue estimate); while earnings exceeded my estimates.
Based upon 25Q1 results and its outlook, management’s has raised its 2025 guidance for revenue from ~$45.5 billion to a range of $45.8-$46.8 billion. The bump in revenue guidance is due mostly to higher expected Revlimid sales and favorable foreign currency. Operating expenses are expected to be $16.2 billion, up $200 million, also due to currency. Other income is now expected to be $100 million, up from $30 million. As a result, management now anticipates 2025 diluted non-GAAP EPS of $6.70-$7.00, up from $6.55-$6.85 previously.
My revised 2025 projections are mostly in line with guidance. They show revenues of $46.4 billion, GAAP EPS of $5.21 and non-GAAP EPS of $6.75. For 2026, I now project revenues of $45.0 billion, down 3.1%, GAAP EPS of $5.60 and non-GAAP EPS of $6.50. My 2026 non-GAAP EPS estimate is down from nearly $7.00 previously, mostly due to slower expected revenue growth in the growth portfolio, a faster rate of decline in the legacy portfolio and lower projected gross margin, offset partially by lower assumed MS&A expenses.
Since my last report, BMY’s stock has fallen nearly 18%, worse than the 7% decline in the S&P 500 and the 8% drop in the NYSE ARCA Pharmaceutical Index ($DRG). The stock rose to a peak of $63.13 in early March, close to my price target of $64, but it has fallen sharply since early April, when tariff fears took down the broader market.
Based mostly on the stock’s recent decline, I am reducing my price target from $64 from $60. That equates to a one-year forward multiple of 10.7 times projected 2026 GAAP EPS of $5.60 or 9.2 times 2026 non-GAAP EPS of $6.50. The assumed non-GAAP multiple is below the peer group average of 12.0 times, so the stock has recovery potential beyond the $60 price target. Along with its 5.2% dividend yield, the stock has a potential total return of 30.6% from today’s closing price of $47.90. Accordingly, I am raising my performance rating from “2” (Outperform) to “1” (Buy).
This is a summary of Lark Research’s recent report on Bristol-Myers Squibb Company (BMY). To obtain a copy of the report, please reach out to Steve Percoco using the contact information provided below.
June 20, 2025 (Report published on April 25, 2025.)
Stephen P. Percoco
Lark Research
839 Dewitt Street
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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