Bristol-Myers Squibb Company (BMY): A Bull Case Theory

We came across a bullish thesis on Bristol-Myers Squibb Company on CompoundingLab’s Substack. In this article, we will summarize the bulls’ thesis on BMY. Bristol-Myers Squibb Company's share was trading at $49 recently. BMY’s trailing and forward P/E were 16.6 and 8 respectively according to Yahoo Finance.

Bristol-Myers Squibb Co. (NYSE: BMY) appears modestly undervalued following its recent earnings release, with valuation work suggesting the stock trades at about a 20% discount to fair value. If the price adjusts to intrinsic value within three years, it could deliver an estimated annual alpha of roughly 7%. The company’s long-term story reflects a transition-driven growth model supported by acquisitions and product lifecycle management. From 2015 to 2018, BMY’s revenue remained steady at around $19–22 billion as it streamlined operations after divestitures.

The pivotal shift came in 2020 with the Celgene acquisition, which lifted revenue sharply from approximately $26 billion to $42.5 billion by adding high-margin oncology drugs such as Revlimid and Pomalyst. Since then, growth has normalized, with 2021–2024 sales hovering near $46–48 billion, as continued strength from Eliquis and Opdivo offsets declines in Revlimid due to generic competition. Over the past decade, the company’s compound annual growth rate stands at about 12%, though organic growth excluding Celgene is closer to the low- to mid-single digits.

The valuation model assumes a weighted average cost of capital (WACC) of 6.7%, a 10.8x EBITDA exit multiple, and reinvestment driven by the most recent sales-to-capital ratio. Based on these assumptions, enterprise value is estimated at approximately $155 billion, implying an intrinsic share value between $47 and $59, versus the current ~$46 level. Despite modest undervaluation, the author prefers to wait for a deeper discount before entry, citing limited growth visibility and execution risk.

Previously we covered a bullish thesis on Bristol-Myers Squibb Company (BMY) by Magnus Ofstad in March 2025, which highlighted the company’s high-risk, high-reward setup driven by Cobenfy’s potential in Alzheimer’s treatment. The company’s stock has depreciated approximately by 22% since our coverage. This is because the thesis didn’t play out. CompoundingLab shares a similar view but emphasizes valuation realism and capital discipline.

Bristol-Myers Squibb Company is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 67 hedge fund portfolios held BMY at the end of the second quarter which was 69 in the previous quarter. While we acknowledge the potential of BMY as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.