Bristol-Myers Squibb (BMY) 25Q3 Update

25Q3 net revenue rose 2.8% to $12.2 billion, as an 18.0% rise in the growth portfolio more than offset an 11.8% decline in the legacy portfolio.  Dollar sales gains in Eliquis, Opdivo, Reblozyl, Camzyos and Breyanzi were partially offset by declines in Revlimid, Pomalyst, Abraxane and Sprycel.  Average U.S. net selling prices are down 5% YTD vs. last year, which implies a net selling price decline of 1.5% for 25Q3, according to my calculations.  Adjusted gross margin fell 310 bp to 72.9%, due mostly to higher alliance profit sharing and product mix.  SG&A expenses declined 9.8% due to strategic productivity initiatives; while R&D expense increased 6.5% from an $85 million IPRD impairment charge and higher drug development costs associated with recent acquisitions.  Likewise, acquired IPRD costs jumped from $262 million to $633 million, due to higher upfront fees associated with recent acquisitions.  Other income/expense swung from a net expense of $234 million to income of $108 million, due mostly to higher investment income and gains on equity investments.  Thus, GAAP EPS was $1.08, up 81% from $0.60 in 24Q3, but non-GAAP EPS declined 9.5% from $1.80 to $1.63.  I had anticipated revenue of $11.6 billion, GAAP EPS of $1.17 and non-GAAP EPS of $1.57.

Management raised its 2025 guidance for revenue from $46.5-$47.5 billion to $47.5-$48.0 billion, due to continued solid performance in the growth portfolio.  Operating expense guidance is unchanged at $16.5 billion. Other income is now expected to be $500 million, up from $250 million, reflecting the 25Q3 gain.  Thus, management narrowed its 2025 diluted non-GAAP EPS guidance range to $6.40-$6.60 from $6.35-$6.65 previously.

My revised 2025 projections are mostly in line with guidance.  They show revenues of $47.8 billion, GAAP EPS of $4.15 and non-GAAP EPS of $6.52.  For 2026, I now project revenues of $46.1 billion, down 3.5% from 2025, GAAP EPS of $5.06 and non-GAAP EPS of $6.56, up $0.04 from my previous estimate.

Since my last report on 8/2, BMY’s stock has delivered a total return of 24.2%, better than the S&P 500’s 10.1% return and in line with the NYSE ARCA Pharmaceutical Index ($DRG) 22.9% price gain.  The stock traded lower from August to the end of October, underperforming both benchmarks, but it has surged 27.5% since then.  The strong rebound in BMY and peers probably anticipated last week’s announced industry settlement on pricing with the U.S. government.  The stock is now overbought, with an RSI above 70, so I am cautious in my near-term outlook.

I am maintaining my 12-month price target of $60, which equates to a one-year forward multiple of 11.9 times projected 2026 GAAP EPS of $5.02 and 9.2 times 2026 non-GAAP EPS of $6.52.  The assumed non-GAAP multiple is below the peer group average of 13.3 times (excluding LLY), so the stock may yet have recovery potential beyond the $60 price target.  Including its 4.7% dividend yield, the stock has a potential total return of 15.2% from Friday’s closing price of $54.19.  Accordingly, I am lowering my performance rating from “1” (Buy) to “2” (Outperform).  I will revisit my projections and valuation after the company reports 25Q4 results and issues 2026 guidance in early February.

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

January 2, 2026 (Report published on December 21, 2025.)

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

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