Bristol-Myers Squibb Company (BMY) Stock Valuation — PE Analysis
Drug Manufacturers - General · NYSE
Current Price
$57.13
PE Ratio (TTM)
16.0x
Intrinsic Value
$39.29
-45.4% 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 PE valuation
A base case PE valuation for BMY estimates a fair value of about $39.29 per share, against a current price of $57.13. The model assumes -4.9% annual earnings growth, a 16x target PE multiple, and a 10% discount rate.
Intrinsic Value
$39.29
Margin of safety
-45.4%
Expected annual return
-7.2%
Base case assumptions: -4.9% annual earnings growth, 16x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the BMY PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Bristol-Myers Squibb Company respond.
Open PE 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 PE Stock Valuation Data
PE Ratio (TTM)
16.0x
PEG Ratio
0.49
Earnings Yield
6.23%
ROE (TTM)
39.0%
Revenue/Share (TTM)
$23.72
Dividend Yield
4.38%
Debt/Equity
2.22x
Frequently Asked Questions
What is the PE ratio of BMY?
The trailing twelve-month PE ratio of BMY reflects how much investors pay per dollar of Bristol-Myers Squibb Company's earnings. This metric is most useful when compared to Drug Manufacturers - General peers and the company's own historical range.
Is BMY overvalued based on PE ratio?
BMY's PE of 16.0x combined with a PEG ratio of 0.49 provides a growth-adjusted perspective. A PEG below 1.0 suggests BMY may be undervalued relative to its earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Drug Manufacturers - General, a DCF analysis may be more appropriate.
How do I value BMY stock using PE ratio?
To value Bristol-Myers Squibb Company using PE: (1) Compare the current PE (16.0x) against the Drug Manufacturers - General median to assess relative pricing, (2) check the PEG ratio (0.49) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of BMY?
BMY's PEG ratio is 0.49, calculated by dividing the PE ratio (16.0x) by the expected earnings growth rate. A PEG below 1.0 is traditionally considered a sign of undervaluation — the market may not be fully pricing in the growth potential. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for BMY stock valuation?
PE ratio gives a quick relative read — how BMY is priced versus Drug Manufacturers - General peers. DCF provides an absolute value based on projected free cash flows. For BMY, with a strong ROE of 39.0%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See BMY DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Healthcare valuationsP/E and DCF value BMY with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic 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.