Bristol-Myers Squibb Company (BMY) Stock Valuation — DCF Analysis
Drug Manufacturers - General · NYSE
Current Price
$57.13
Intrinsic Value
$46.75
-22.2% margin of safety
COMPETITIVE MOAT
↑Strong Patent Protection
BMY benefits from patent exclusivity on key blockbuster drugs, creating a significant barrier to entry for competitors and ensuring sustained revenue streams.
↑Diversified Product Portfolio
A broad range of approved therapies across multiple therapeutic areas reduces reliance on any single drug. This diversification mitigates risk from individual product failures or patent expirations.
↑Established R&D Pipeline
Significant investment in research and development fuels a pipeline of promising new drug candidates. This ongoing innovation is crucial for future growth and maintaining market leadership.
INVESTMENT RISKS
↓Patent Expirations and Generic Competition
Loss of patent protection on major drugs will lead to increased generic competition, significantly impacting revenue and profitability for those products.
↓Clinical Trial Failures
The drug development process is inherently risky. Failures in late-stage clinical trials for promising pipeline candidates can lead to substantial financial losses and delays.
↓Regulatory Hurdles and Pricing Pressures
Navigating complex regulatory approval processes and facing increasing pressure on drug pricing from governments and payers pose ongoing challenges to profitability.
Base case
BMY base case valuation
A base case discounted cash flow model for BMY estimates an intrinsic value of about $46.75 per share, against a current price of $57.13. The model assumes -5.2% annual free cash flow growth, a 10.0% discount rate, and a 10x exit multiple.
Intrinsic Value
$46.75
Margin of safety
-22.2%
Expected annual return
-3.9%
Base case assumptions: -5.2% annual growth, 10.0% discount rate, 10x exit multiple, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the BMY valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Bristol-Myers Squibb Company respond.
Open DCF Calculator for BMYCompany Overview
Bristol-Myers Squibb Company operates as a global biopharmaceutical entity, actively involved in the research, development, licensing, production, and worldwide commercialization of its medicinal portfolio. The company's therapeutic areas span hematology, oncology, cardiovascular health, immunology, fibrotic conditions, neuroscience, and infectious diseases like COVID-19. Its significant pharmaceutical offerings include Revlimid, an oral immunomodulatory agent for multiple myeloma, and Eliquis, an oral anticoagulant crucial for reducing stroke risk and systemic embolism in non-valvular atrial fibrillation, as well as treating deep vein thrombosis and pulmonary embolism. The portfolio also features Opdivo, utilized across various anti-cancer indications; Pomalyst/Imnovid, prescribed for multiple myeloma patients; and Orencia, targeting active rheumatoid arthritis and psoriatic arthritis in adults. Other key therapies are Sprycel, employed in the management of Philadelphia chromosome-positive chronic myeloid leukemia; Yervoy, indicated for patients with unresectable or metastatic melanoma; and Abraxane, a protein-bound chemotherapy formulation. Furthermore, Bristol-Myers Squibb offers Reblozyl, addressing anemia in adult patients with beta thalassemia; Empliciti, another treatment option for multiple myeloma; and Zeposia, designed to treat relapsing forms of multiple sclerosis. Revolutionary treatments like Breyanzi, a CD19-directed genetically modified autologous T cell immunotherapy for adult patients battling relapsed or refractory large B-cell lymphoma, are also part of its lineup. Completing its product range are Inrebic, an oral kinase inhibitor specifically for adult myelofibrosis, and Onureg, used in the treatment of adult patients with acute myeloid leukemia (AML). Bristol-Myers Squibb distributes its pharmaceutical products through a diverse network encompassing wholesalers, distributors, pharmacies, retail outlets, hospitals, clinics, and governmental organizations. Founded in 1887 and formerly known as Bristol-Myers Company, the firm maintains its headquarters in New York, New York.
Financial Metrics — BMY Stock Valuation Data
Revenue/Share (TTM)
$23.72
FCF/Share (TTM)
$5.83
ROIC (TTM)
13.5%
ROE (TTM)
39.0%
P/FCF
9.8x
EV/EBITDA
11.0x
FCF Yield
10.21%
Debt/Equity
2.22x
Based on trailing twelve-month data, BMY shows a free cash flow per share of $5.83 and a ROIC of 13.5%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 9.8x and FCF yield of 10.21% are important context metrics when evaluating BMY's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of BMY?
Bristol-Myers Squibb Company currently generates $5.83 in free cash flow per share. At the current price of $57.13, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is BMY undervalued?
BMY trades at a P/FCF ratio of 9.8x with a free cash flow yield of 10.21%. This relatively low P/FCF may suggest the stock is attractively priced relative to its cash generation. However, whether BMY is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value BMY stock using DCF?
To perform a DCF valuation on Bristol-Myers Squibb Company: (1) Start with the trailing free cash flow per share ($5.83) as the base, (2) project future FCF growth over 5-10 years based on Drug Manufacturers - General industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting BMY's risk profile — with a debt-to-equity of 2.22x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to BMY?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Bristol-Myers Squibb Company, this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Drug Manufacturers - General trends, then discounting those amounts to today's dollars. BMY's ROIC of 13.5% shows moderate capital returns.
How does WACC affect BMY stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For BMY, with a debt-to-equity ratio of 2.22x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 11.0x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See BMY PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Healthcare valuationsDCF and P/E value BMY with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.