BMY Rallies 17.3% in Six Months: Buy, Sell or Hold the Stock?

Core Viewpoint - Bristol Myers Squibb Company (BMY) has shown solid performance recently, with shares increasing by 17.3% over the past six months, although this is below the biotech industry's growth of 23.4% [1][2]. Financial Performance - BMY has outperformed both the sector and the S&P 500, particularly after reporting better-than-expected third-quarter results on October 30, driven by strong demand for key products [2][10]. - The company raised its revenue guidance, reflecting positive momentum from its growth portfolio [2][8]. Growth Drivers - BMY's Growth Portfolio includes key brands such as Opdivo, Reblozyl, and Breyanzi, which have shown strong performance and are expected to sustain top-line growth [6][12]. - Opdivo sales are particularly strong in the U.S., driven by successful launches and ongoing label expansions internationally [7][8]. - Reblozyl has annualized sales exceeding $2 billion, supported by demand in various treatment settings [9]. - Breyanzi has surpassed a $1 billion annualized run rate, indicating solid uptake in large B-cell lymphoma [11]. Strategic Collaborations - BMY announced the acquisition of Orbital Therapeutics for $1.5 billion, which will enhance its pipeline with OTX-201, a next-generation CAR T-cell therapy [13]. - The company also entered a collaboration with BioNTech for the co-development of a bispecific antibody targeting solid tumors [14][15]. Legacy Portfolio Challenges - BMY's legacy portfolio faces significant pressure from generic competition, particularly affecting drugs like Revlimid and Pomalyst, with a projected decline of 15-17% in 2025 [16][17]. - The company has a pricing agreement with the U.S. government for Eliquis, its largest revenue contributor, which will be supplied at no cost to Medicaid starting January 1, 2026 [18][19]. Valuation and Estimates - BMY's shares currently trade at a price/earnings ratio of 9.30x forward earnings, which is lower than the large-cap pharma industry's average of 17.91x [20]. - The Zacks Consensus Estimate for 2025 EPS has increased to $6.51 from $6.48 over the past 60 days [22]. Investment Outlook - BMY is considered a safe haven for investors in the biotech sector, with strong contributions from its growth portfolio stabilizing revenue despite challenges from generics [24]. - The company plans to continue expanding its domestic manufacturing footprint and has received tariff relief as part of its agreement with the government [25].