Bristol Myers Loses 20.7% in 3 Months: Buy, Sell or Hold the Stock?

Core Viewpoint - Bristol Myers (BMY) has underperformed the market, with a 20.7% decline in shares over the past three months compared to a 9.6% decline in the industry [1][3]. Financial Performance - Despite a better-than-expected first-quarter performance and an increase in annual revenue guidance, BMY's stock has declined, likely due to broader market concerns and skepticism about growth prospects [4]. - Eliquis, a key drug for BMY, saw a 4% decrease in sales in the first quarter, attributed to the redesign of Medicare Part D in the U.S. [5]. Drug Portfolio and Competition - BMY is facing challenges from generic competition affecting its legacy drugs, including Revlimid, Pomalyst, Sprycel, and Abraxane [4]. - The company is relying on newer drugs such as Opdualag, Reblozyl, and Breyanzi to stabilize its revenue base [6]. - Opdivo, a leading immuno-oncology drug, has shown solid revenue growth primarily driven by volume [7]. Regulatory Approvals - Recent approvals for Opdivo and Cobenfy are expected to enhance BMY's portfolio, with Cobenfy being the first new pharmacological approach to treating schizophrenia in decades [10][12]. Pipeline Challenges - BMY has faced setbacks in its pipeline, including disappointing results from the ODYSSEY-HCM study for Camzyos and the ARISE study for Cobenfy [11][12]. Financial Health - As of March 31, 2025, BMY reported cash and equivalents of $12.1 billion against a long-term debt of$46.1 billion, indicating a high debt ratio [13]. - BMY's shares currently trade at a price/earnings ratio of 7.16x forward earnings, lower than its historical mean and the large-cap pharma industry average [14]. Earnings Estimates - The Zacks Consensus Estimate for 2025 EPS has increased to $6.89 from$6.75 over the past 60 days, while the estimate for 2026 remains unchanged at $6.08 [16]. Investment Outlook - BMY's newer drugs and pipeline diversification are seen as stabilizing factors amid generic competition, but the company is advised to wait and watch due to recent setbacks [18]. - The attractive dividend yield of 5.29% is a reason for existing investors to remain invested [18].