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Bristol Myers Squibb: Take The Red Pill

Jun. 05, 2023 8:05 AM ETBristol-Myers Squibb Company (BMY)19 Comments


  • Bristol Myers Squibb (BMY) is an undervalued pharmaceutical stock with strong positioning in cardiovascular, oncology, and immunology sectors.
  • BMY has a strong balance sheet, high margins, and a pipeline of newer drugs, making it an attractive long-term investment.
  • BMY stock offers a well-covered 3.5% dividend yield and has a consensus Buy rating from analysts, with an average price target of $79.
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Young attractive female scientist holding a red transparent pill

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It seemed like it was just yesterday that pharmaceutical stocks were being lauded by the market for their cash-rich and inflation-resistant business models. But thank goodness for a fickle market, as it seems that investment dollars have flown

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Gen Alpha profile picture

I am Gen Alpha. I have more than 14 years of investment experience, and an MBA in Finance. I focus on stocks that are more defensive in nature, with a medium- to long-term horizon.

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of BMY either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I am not an investment advisor. This article is for informational purposes and does not constitute as financial advice. Readers are encouraged and expected to perform due diligence and draw their own conclusions prior to making any investment decisions.

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Comments (19)

charged profile picture
2023 revlimid 10b
2026 Eliquis 14b
2026 Yervoy 2b
2028 Opdivo 12b
2028 Zeposia 4.5b
43b loe exposure ?

In my opinion bmy will struggle for the next 7 years to grow without a major acquisition. There will be buying opportunities better than today.
Gen Alpha profile picture
@charged I wouldn't mind getting BMY at a lower price. Time will tell.
Add the dividend to covered call premiums and make a very nice return on cash
Gen Alpha profile picture
@homerbart thanks for commenting and good luck.
Dividend Ambassador profile picture
Mr. Market has BMY in the penalty box for no good reason. BMY market valuation is a dream for the patient value investor who wants to initiate build or pad a position.
Gen Alpha profile picture
@killiondt Well put, always good to see your thoughts.
Et20 profile picture
Revlimid is off patent. Surprised you did not mention this
Eliquis will be another tough gap to fill
I am mildly bullish on BMY but expectations need to be tapered
Gen Alpha profile picture
@Et20 the market dislikes uncertainty and has already built that into the price.
Puche profile picture
Drip!!! Drip!! Drip!!!

Slow and steady! IMO this is a solid LT dividend grower with the potential to surprise with some solid capital appreciation over the next 5-7 years.

Balance sheet and FCF is under appreciated! Lots of optionality which provide me with a high degree of confidence in being patient and dripping the dividends.

My two cents. Good luck to all!
@Puche agreed but I must say I'd have to pair it with Abbv or Mrk as the price appreciation has seemed very stagnant.
Puche profile picture
@Cj21 as the SA community knows I’m negative on ABBV over the next couple of years. Imo the Humira impact will be much greater and faster than the street is expecting. IMO it’s dead money but again that’s just my two cents.

I like REGN much better over the next 7-10 years with a pipeline in the oncology space that is grossly undervalued. Again just my two cents.

No issue with MRK. Solid large cap player.

Slow and steady! Good luck to you!
Gen Alpha profile picture
@Puche thanks for commenting. The big pharma companies will survive and thrive over the long run, given their strong balance sheets, knowledge base, and ability to adapt as they have built that into their DNA over decades.
eclipsme profile picture
Looks to me like it has been overlooked for about 5 years now. What´s up with that? I would grab more but what am I missing?
@eclipsme Government threat of price controls.
Gen Alpha profile picture
@eclipsme Value investing works because it doesn't seem to work for a long time. There are also lots of companies that are perpetually overvalued.
eclipsme profile picture
@Gen Alpha True that!
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