Bristol Myers Squibb (NYSE: BMY) has climbed about 40% over the past year, yet the drugmaker still changes hands at less than 10 times forward earnings — one of the cheapest multiples among large pharmaceutical stocks. Shares last traded near $60.80, a 43% rebound from the 52-week low of $42.52, after second-quarter results showed newer medicines growing fast enough to more than cover declines in older blockbusters. Management raised 2026 guidance on July 30, lifting the non-GAAP EPS outlook to a $6.75–$7.00 range, up from $6.05–$6.35 previously, alongside revenue of $49.0–$50.0 billion. With third-quarter results due October 29, the market is about to find out whether the growth engine can repeat its pace.
Why it matters
The Q2 report explains both the rally and the discount. Total revenue rose 6% to $13.0 billion, up 5% excluding currency effects, but the split underneath is the real story: the Growth Portfolio — Camzyos, Breyanzi, Reblozyl, Opdualag and Opdivo Qvantig — generated $7.6 billion, a 15% increase on the prior year, while the Legacy Portfolio slid 4% to $5.4 billion. Non-GAAP earnings of $2.04 per share beat consensus near $1.60 by roughly 28%. Chief executive Christopher Boerner credited steady execution and momentum for the raised full-year outlook, and the numbers suggest the confidence is earned rather than hoped for.
The growth names are posting numbers that look more biotech than big pharma. Reblozyl sales climbed 29% to $735 million on a currency-neutral basis. Breyanzi's $484 million marked a 41% gain. Camzyos surged 59% to $416 million. And Opdivo Qvantig brought in $261 million, over three times its prior-year total. Eliquis, the cash cow still sitting inside the legacy bucket, grew about 22% to roughly $4.5 billion, and management lifted its full-year Eliquis growth forecast to 20–25% from 10–15%. The other side of the ledger is rough: Revlimid fell 49% excluding currency, Pomalyst/Imnovid dropped 71%, and Sprycel declined 26% on generic competition.
That is the entire bull-bear debate in one table.
| Portfolio | Q2 revenue | YoY change | Share of total |
|---|---|---|---|
| Growth (newer drugs) | $7.6B | +15% | 58% |
| Legacy (older drugs) | $5.4B | -4% | 42% |
Run the scenario math and the raised guidance looks beatable rather than brave. Annualize the Q2 split: the growth book runs at about $30.4 billion, so 15% growth adds roughly $4.5 billion of annual revenue, while the legacy book at about $21.6 billion loses only around $0.9 billion at a 4% decline. Net: about $3.6 billion of added revenue, or roughly 7% on 2025's $48.2 billion base. Management's raised midpoint of $49.5 billion implies just 2.7% growth — the bar clears even if the growth portfolio cools to 10% and legacy erosion deepens to 5%. The multiple math is equally forgiving: at the $6.875 guidance midpoint, a $60.80 share price is about 8.8 times forward earnings, a shade below Yahoo Finance's 9.36x analyst-based figure. Either way, the market is paying a single-digit multiple for a business whose growing half expands at a mid-teens rate. Put differently, the growth book alone covers the legacy hole roughly four times over, which is exactly why the stock keeps grinding higher even as analysts trim their targets.
Defensive cash flow has a natural audience right now. While growth stocks have wobbled on renewed rate-hike bets — the Nasdaq sold off on hot PPI data this week — BMY's dividend and buyback-friendly cash generation give it a bid from a different buyer base. Healthcare had a rough start to October, with the sector dragging the S&P 500 lower, which makes BMY's divergence from its own sector worth watching into earnings.
The setup into October 29 is simple: repeat the 15% growth-portfolio pace and the discount argument gets louder.
What to watch
- October 29 Q3 results — the first real checkpoint for the 15% growth-portfolio run rate and the raised $6.75–$7.00 EPS guide. A repeat of the Q2 beat forces the rerating debate; a miss reopens the legacy-erosion story.
- Two FDA target dates in 2027 — March 11 for Reblozyl plus a JAK inhibitor in myelofibrosis-associated anemia (backed by the INDEPENDENCE study; Reblozyl did about $1.3 billion in first-half sales, up 23%), and May 13 for the mezigdomide NDA in multiple myeloma that has relapsed or resisted prior therapy, following positive Phase 3 SUCCESSOR-2 data.
- Analyst skepticism — Wells Fargo cut its target to $60 (Equal Weight) on October 13, citing Eliquis patent-expiry risk in parts of Europe and questions around admilparant; Leerink cut to $59 on October 5. Consensus target sits at $64.88, barely 7% above the current price.
- Spending — 2026 operating expenses are guided to about $16.5 billion, up from $16.3 billion, on pipeline and launch investment. If readouts slip, that spending becomes the bear case.
MarketRadar take
The numbers support the multiple. Mid-teens growth on nearly 60% of revenue at a single-digit forward P/E is objectively cheap, and the raised guidance clears with room to spare even if growth cools to 10%. The offset is positioning and sentiment: the stock has already rebounded 43% off its lows, two banks trimmed targets this month, and the October 29 print is the first test of whether the growth portfolio can repeat its Q2 pace. Neutral into the print, with the fundamental skew favoring holders over sellers.
