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BMY Stock: 20% Discount, But Wait for Deeper Dive?
29 Nov
Summary
- Bristol-Myers Squibb shares trade at a 20% discount to estimated fair value.
- Celgene acquisition in 2020 significantly boosted BMY's revenue.
- Analysts advise caution, suggesting a deeper discount before investment.
Bristol-Myers Squibb Company (BMY) is currently trading at an estimated 20% discount to its intrinsic value, suggesting a potential upside if the stock price converges to fair value within the next three years. The company's financial narrative has been shaped by strategic acquisitions and product lifecycle management, notably the transformative Celgene acquisition in 2020.
This acquisition substantially increased BMY's revenue by integrating lucrative oncology drugs like Revlimid. While recent years have seen normalized growth, with sales stabilizing around $46-48 billion, key products such as Eliquis and Opdivo continue to perform strongly, offsetting declines from Revlimid due to generic competition.
Valuation models indicate an enterprise value of approximately $155 billion, translating to an intrinsic share value between $47 and $59, compared to its recent trading price near $46. Despite this modest undervaluation, industry observers recommend patience, advocating for a more substantial discount before making an investment due to perceived execution risks and uncertain growth prospects.
