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Opinions Paul Harris, CFA
Bristol Myers SquibbBMYBUYSep 12, 2012
Stock price when the opinion was issued
As of Jun 18, 2026. Market Open.
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Big on immune oncology and cardio. Technically doesn't look great, but eventually "the train will come along and collect the mail bag". Makes a ton of $$ in NA. Wide moat. Concerns about pipeline, but he thinks it's pretty good. Limited downside. Yield is 4.9%.
Good pricing power. Because products are so specialized, FDA puts them on sort of a fast track.
In the past quarter, They recently bought 3 companies, including Mirati, a small oncology company, and Karuna who may develop a wonder drug to treat schizophrenia. BMY needs to buy companies, because their top 3 drugs face steep patent cliffs, like a blood-clot drug, accounting for over 61% of 2023 (Jan-Sept)'s sales.
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Premium contentThe company has partnered with a Chinese pharma company for a new drug to lung and breast cancer patients. They will have exclusive rights outside of China. It trades at 13x earnings and supports a ROE of 26%. It has a good dividend, backed by a payout ratio under 60% of cash flow. The company has been prudentially using some cash reserves to aggressively buy back shares and retire debt. We recommend placing a stop at $44, looking to achieve $63 -- upside potential of 23%. Yield 4.4%
(Analysts’ price target is $62.82)
It has some real challenges from 2026 to 2030 when some of their drugs will come off patents. They will need to fill their pipeline. This is reflected in the 8X earnings multiple. As for Amgen, it has defensive characteristics but we need to make sure they execute their plans.
Jim LebenthalJim Lebenthal
Had a couple of issues. One of them is their cardiovascular drug that hasn’t been approved by FDA. Also, have Plavix which is coming off patent which will hurt them on a year-over-year basis. In spite of this, he feels the stock is a Buy. Have some cancer drugs that are coming out. Acquired Amylin. Cost-cutting from this and the value from the products they got will flow through in the next couple of years. Trading at a reasonable multiple and has a reasonable dividend.