Bristol-Myers Squibb (BMY) 25Q2 Update

25Q2 net revenue rose 0.6% to $12.3 billion, as a 17.9% gain in the growth portfolio more than offset a 14.1% decline in the legacy portfolio.  Among the individual medicines, sales gains in Eliquis, Breyanzi, Opdivo, Reblozyl and Camzyos were mostly offset by sales declines in Revlimid, Sprycel, Pomalyst and Abraxane (due primarily to the impacts of generics and the Medicare Part D redesign).  The company reported that average U.S. net selling prices decreased 7% YTD vs. last year.  Adjusted gross margin fell 300 bp to 72.6%, due mostly to product mix and higher profit sharing.  Marketing, selling & administrative (MS&A) expenses fell 33%; and R&D expense dropped 16%, due to strategic productivity initiatives and lower impairment charges.  IPRD rose from $132 million last year to $1.5 billion, due to an upfront fee (equivalent to $0.57 per share) associated with the recently announced BioNTech strategic partnership.  Thus, GAAP EPS was $0.64, below 24Q2’s $0.83, and non-GAAP EPS was $1.46 vs. $2.07.  I had anticipated revenue of $11.2 billion, GAAP EPS of $1.28 and non-GAAP EPS of $0.63.

Management raised its 2025 guidance for revenue from $45.8-$46.8 billion to $46.5-$47.5 billion, due to strong performance in the growth portfolio, better-than-expected legacy portfolio sales and $200 million from favorable foreign exchange.  Operating expenses are expected to be $16.5 billion, up $300 million, due to higher investment spending on its pipeline and growth portfolio. Other income is now expected to be $250 million, up from $100 million.  As a result, 2025 diluted non-GAAP EPS is now expected to be $6.35-$6.65, down from $6.55-$6.85 previously.  The company intends to reduce debt by $10 billion by mid-2026, which implies no major acquisitions or investments until then.

My revised 2025 projections are mostly in line with guidance.  They show revenues of $47.1 billion, GAAP EPS of $4.23 and non-GAAP EPS of $6.44.  For 2026, I now project revenues of $46.0 billion, down 2.3% from 2025, GAAP EPS of $5.02 and non-GAAP EPS of $6.52.  My 2026 non-GAAP EPS estimate is essentially unchanged from $6.50 previously

Since my last report, BMY’s stock has fallen nearly 8%, worse than the 14.1% rise in the S&P 500 and the 2.8% drop in the NYSE ARCA Pharmaceutical Index ($DRG).  Health care stocks in general, including large pharmaceutical stocks, continue to be out of favor.  Yet, BMY has underperformed its peers.  The stock fell 5.8% on Thursday (7/31), the day of the earnings release, which also coincided with President Trump’s order to pharmaceutical companies to reduce prices to bring them in line with other developed nations.  On Friday (8/1), BMY’s stock rebounded 2.1%.

Despite the stock’s recent decline, I am maintaining my price target of $60.  That equates to a one-year forward multiple of 12.0 times projected 2026 GAAP EPS of $5.02 or 9.2 times 2026 non-GAAP EPS of $6.52.  The assumed non-GAAP multiple is below the peer group average of 11.1 times, so the stock may have recovery potential beyond the $60 price target.  Along with its 5.6% dividend yield, the stock has a potential total return of 41.3% from Friday’s closing price of $44.23.  Accordingly, I am maintaining my performance rating of “1” (Buy).

This is a summary of my recent update report on Bristol-Myers Squibb Company (BMY). To obtain a copy of the report, please reach out to me using the contact information provided below.

August 4, 2025 (Report published on August 3, 2025.)

Stephen P. Percoco
Lark Research
839 Dewitt Street
Linden, New Jersey 07036
(908) 975-0250
admin@larkresearch.com

© 2015-2026 by Stephen P. Percoco, Lark Research.   All rights reserved.

This blog post (as with all posts on this website) represents the opinion of Lark Research based upon its own independent research and supporting information obtained from various sources. Although Lark Research believes these sources to be reliable, it has not independently confirmed their accuracy. Consequently, this blog post may contain errors and omissions. Furthermore, this blog post is a summary of a recent report published on this subject and that report provides a more complete discussion and assessment of the risks and opportunities of any investment securities discussed herein. No representation or warranty is expressed or implied by the publication of this blog post. This blog post is for informational purposes only and shall not be construed as investment advice that meets the specific needs of any investor. Investors should, in consultation with their financial advisers, determine the suitability of the post’s recommendations, if any, to their own specific circumstances. Lark Research is not registered as an investment adviser with the Securities and Exchange Commission, pursuant to exemptions provided in the Investment Company Act of 1940. This blog post remains the property of Lark Research and may not be reproduced, copied or similarly disseminated, in whole or in part, without its prior written consent.