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Should You Buy, Hold, or Sell BMY Stock Ahead of Q2 Earnings?
Read MoreHide Full Article
Key Takeaways
BMY to report Q2 results July 31, with sales and EPS estimates at $11.38B and $1.18, respectively.
Generic pressure on legacy drugs likely weighed on revenues, partially offset by growth portfolio sales.
Cost-cutting plans aim to save $1.5B by 2025 and another $2B annually by 2027 to boost profitability.
Biotech giant Bristol-Myers Squibb Company ((BMY - Free Report) ) is scheduled to report second-quarter 2025 results on July 31, before market open. The Zacks Consensus Estimate for sales and earnings is pegged at $11.38 billion and $1.18 per share, respectively.
Earnings estimate for 2025 has decreased to $6.37 from $6.76 per share over the past 30 days, while that for 2026 has declined to $6.03 from $6.04.
Image Source: Zacks Investment Research
BMY’s Earnings Surprise History
BMY has an excellent track record. Its earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 20.16%. In the previously reported quarter, the company’s earnings beat estimates by 19.21%.
What Our Model Predicts for BMY
Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Earnings ESP for BMY is -7.92%. The company currently carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Factors Influencing BMY’s Q2 Results
Total quarterly revenues are likely to have been impacted by a decline in sales from the legacy portfolio, which includes Eliquis, Revlimid, Pomalyst, Sprycel and Abraxane, among others.
Generic competition for Sprycel, Revlimid, Abraxane and Pomalyst has likely pulled down revenues from this portfolio.
The Zacks Consensus Estimate for Pomalyst’s second-quarter sales is pegged at $727 million and our model estimate for the same is pinned at $690.8 million.
Due to the impact of the Medicare Part D redesign, Eliquis' sales growth in the United States might have been tempered sequentially.
The Zacks Consensus Estimate and our model estimate for Eliquis’ second-quarter sales are pegged at $3.5 billion and $3.6 billion, respectively.
Bristol-Myers collaborated with Pfizer ((PFE - Free Report) ) for Eliquis in 2007. Profits and losses are shared equally worldwide, except in certain countries where Pfizer commercializes Eliquis and pays BMY a sales-based fee.
Nonetheless, this decline has likely been partially offset by an increase in growth product portfolio sales. Growth portfolio primarily comprises Opdivo, Orencia, Yervoy, Reblozyl, Opdualag, Abecma, Zeposia, Breyanzi, Camzyos, Sotyku, Krazati and others.
Consistent label expansions in newer metastatic and adjuvant indications have likely maintained momentum for immuno-oncology drug Opdivo in the second quarter. The Zacks Consensus Estimate and our model estimate for Opdivo sales are pegged at $2.4 billion and $2.43 billion, respectively.
The Zacks Consensus Estimate and our model estimate for Orencia sales are pegged at $909 million and $871 million, respectively.
The Zacks Consensus Estimate and our model estimate for Yervoy sales are pegged at $652 million and $653.7 million, respectively.
Reblozyl posted solid growth in both the United States and international markets in the last reported quarter. Sales in the United States are being driven by strong demand due to a broad label in the first-line treatment for anemia in adults with lower-risk myelodysplastic syndromes who may require transfusions. International sales growth, driven by strong launches in Europe and Japan, has also likely boosted sales of this drug in the second quarter.
The Zacks Consensus Estimate and our model estimate for Reblozyl sales are pegged at $546 million and $502 million, respectively.
Strong growth in Opdualag (first-line melanoma) demand in the United States and encouraging uptake in newly launched markets are likely to have fueled sales. The Zacks Consensus Estimate and our model estimate for Opdualag sales are pegged at $278 million and $269.8 million, respectively.
Breyanzi sales have likely benefited due to its best-in-class profile and strong demand growth across all its approved indications. Camzyos sales have likely seen strong growth, driven by increased demand in the United States on the back of new patient starts and higher demand in newly launched markets outside the country. The drug is expected to record steady growth in 2025 due to its compelling efficacy and safety profile in obstructive HCM.
The newly launched schizophrenia drug Cobenfy, too, is off to a solid start, and sales have likely grown sequentially in the second quarter.
Sotyktu sales have likely been under pressure due to higher rebates.
In April 2024, BMY announced a strategic cost-reduction plan that should result in approximately $1.5 billion savings by the end of 2025. Concurrent with the fourth-quarter results, BMY announced an expansion to its existing strategic productivity initiative, which will include approximately $2 billion in additional annualized cost savings by the end of 2027 (with approximately $1 billion to be achieved in 2025).
Consequently, operating expenses are likely to have decreased in the to-be-reported quarter.
BMY’s Price Performance and Valuation
Shares of BMY have lost 14.4% year to date against the industry’s growth of 2%. The stock has also underperformed the sector and the S&P 500 in this timeframe.
Image Source: Zacks Investment Research
Going by the price/earnings ratio, BMY’s shares currently trade at 7.84x forward earnings, lower than its mean of 8.51x and 15.34x for the large-cap pharma industry.
Image Source: Zacks Investment Research
Investment Thesis for BMY
Legacy portfolio sales accounted for 50% of total sales in the first quarter and a continued decline in its sales might have adversely impacted top-line growth.
While drugs like Reblozyl, Breyanzi, Camzyos and Opdualag have enabled BMY to somewhat stabilize its revenue base, these drugs will take some time to fully offset the decline in legacy drug sales.
Nonetheless, approval of additional new drugs and label expansion of top drugs should further diversify its pipeline.
The approval of Cobenfy for schizophrenia broadens BMY’s portfolio and validates the acquisition of Karuna Therapeutics. Cobenfy represents the first new pharmacological approach to treating schizophrenia in decades.
BMY made strategic acquisitions to augment its product portfolio, and these seem to be paying off now. However, there is a long way to go. On the other hand, the company has taken on colossal debt to finance these acquisitions.
BMY recently announced a strategic collaboration agreement with BioNTech ((BNTX - Free Report) ) for the global co-development and co-commercialization of the latter’s investigational bispecific antibody BNT327 across numerous solid tumor types.
BNT327, a next-generation bispecific antibody candidate, targets PD-L1 and VEGF-A. BMY and BNTX will jointly share development and manufacturing costs along with profits on an equal basis.
Stay Invested in BMY Stock
While BMY’s efforts to revive the top line in the face of generic challenges for key drugs are commendable, the company still has a hill to climb as of now.
Irrespective of how the second-quarter results play out, we recommend prospective investors to wait and watch how BMY wades through these challenges before turning positive.
For investors already owning the stock, staying invested would be a prudent move. The company’s attractive dividend yield is a strong positive.
Image: Shutterstock
Should You Buy, Hold, or Sell BMY Stock Ahead of Q2 Earnings?
Key Takeaways
Biotech giant Bristol-Myers Squibb Company ((BMY - Free Report) ) is scheduled to report second-quarter 2025 results on July 31, before market open. The Zacks Consensus Estimate for sales and earnings is pegged at $11.38 billion and $1.18 per share, respectively.
Earnings estimate for 2025 has decreased to $6.37 from $6.76 per share over the past 30 days, while that for 2026 has declined to $6.03 from $6.04.
Image Source: Zacks Investment Research
BMY’s Earnings Surprise History
BMY has an excellent track record. Its earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 20.16%. In the previously reported quarter, the company’s earnings beat estimates by 19.21%.
What Our Model Predicts for BMY
Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
Earnings ESP for BMY is -7.92%. The company currently carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Factors Influencing BMY’s Q2 Results
Total quarterly revenues are likely to have been impacted by a decline in sales from the legacy portfolio, which includes Eliquis, Revlimid, Pomalyst, Sprycel and Abraxane, among others.
Generic competition for Sprycel, Revlimid, Abraxane and Pomalyst has likely pulled down revenues from this portfolio.
The Zacks Consensus Estimate for Pomalyst’s second-quarter sales is pegged at $727 million and our model estimate for the same is pinned at $690.8 million.
Due to the impact of the Medicare Part D redesign, Eliquis' sales growth in the United States might have been tempered sequentially.
The Zacks Consensus Estimate and our model estimate for Eliquis’ second-quarter sales are pegged at $3.5 billion and $3.6 billion, respectively.
Bristol-Myers collaborated with Pfizer ((PFE - Free Report) ) for Eliquis in 2007. Profits and losses are shared equally worldwide, except in certain countries where Pfizer commercializes Eliquis and pays BMY a sales-based fee.
Nonetheless, this decline has likely been partially offset by an increase in growth product portfolio sales. Growth portfolio primarily comprises Opdivo, Orencia, Yervoy, Reblozyl, Opdualag, Abecma, Zeposia, Breyanzi, Camzyos, Sotyku, Krazati and others.
Consistent label expansions in newer metastatic and adjuvant indications have likely maintained momentum for immuno-oncology drug Opdivo in the second quarter. The Zacks Consensus Estimate and our model estimate for Opdivo sales are pegged at $2.4 billion and $2.43 billion, respectively.
The Zacks Consensus Estimate and our model estimate for Orencia sales are pegged at $909 million and $871 million, respectively.
The Zacks Consensus Estimate and our model estimate for Yervoy sales are pegged at $652 million and $653.7 million, respectively.
Reblozyl posted solid growth in both the United States and international markets in the last reported quarter. Sales in the United States are being driven by strong demand due to a broad label in the first-line treatment for anemia in adults with lower-risk myelodysplastic syndromes who may require transfusions. International sales growth, driven by strong launches in Europe and Japan, has also likely boosted sales of this drug in the second quarter.
The Zacks Consensus Estimate and our model estimate for Reblozyl sales are pegged at $546 million and $502 million, respectively.
Strong growth in Opdualag (first-line melanoma) demand in the United States and encouraging uptake in newly launched markets are likely to have fueled sales. The Zacks Consensus Estimate and our model estimate for Opdualag sales are pegged at $278 million and $269.8 million, respectively.
Breyanzi sales have likely benefited due to its best-in-class profile and strong demand growth across all its approved indications. Camzyos sales have likely seen strong growth, driven by increased demand in the United States on the back of new patient starts and higher demand in newly launched markets outside the country. The drug is expected to record steady growth in 2025 due to its compelling efficacy and safety profile in obstructive HCM.
The newly launched schizophrenia drug Cobenfy, too, is off to a solid start, and sales have likely grown sequentially in the second quarter.
Sotyktu sales have likely been under pressure due to higher rebates.
In April 2024, BMY announced a strategic cost-reduction plan that should result in approximately $1.5 billion savings by the end of 2025. Concurrent with the fourth-quarter results, BMY announced an expansion to its existing strategic productivity initiative, which will include approximately $2 billion in additional annualized cost savings by the end of 2027 (with approximately $1 billion to be achieved in 2025).
Consequently, operating expenses are likely to have decreased in the to-be-reported quarter.
BMY’s Price Performance and Valuation
Shares of BMY have lost 14.4% year to date against the industry’s growth of 2%. The stock has also underperformed the sector and the S&P 500 in this timeframe.
Image Source: Zacks Investment Research
Going by the price/earnings ratio, BMY’s shares currently trade at 7.84x forward earnings, lower than its mean of 8.51x and 15.34x for the large-cap pharma industry.
Image Source: Zacks Investment Research
Investment Thesis for BMY
Legacy portfolio sales accounted for 50% of total sales in the first quarter and a continued decline in its sales might have adversely impacted top-line growth.
While drugs like Reblozyl, Breyanzi, Camzyos and Opdualag have enabled BMY to somewhat stabilize its revenue base, these drugs will take some time to fully offset the decline in legacy drug sales.
Nonetheless, approval of additional new drugs and label expansion of top drugs should further diversify its pipeline.
The approval of Cobenfy for schizophrenia broadens BMY’s portfolio and validates the acquisition of Karuna Therapeutics. Cobenfy represents the first new pharmacological approach to treating schizophrenia in decades.
BMY made strategic acquisitions to augment its product portfolio, and these seem to be paying off now. However, there is a long way to go. On the other hand, the company has taken on colossal debt to finance these acquisitions.
BMY recently announced a strategic collaboration agreement with BioNTech ((BNTX - Free Report) ) for the global co-development and co-commercialization of the latter’s investigational bispecific antibody BNT327 across numerous solid tumor types.
BNT327, a next-generation bispecific antibody candidate, targets PD-L1 and VEGF-A. BMY and BNTX will jointly share development and manufacturing costs along with profits on an equal basis.
Stay Invested in BMY Stock
While BMY’s efforts to revive the top line in the face of generic challenges for key drugs are commendable, the company still has a hill to climb as of now.
Irrespective of how the second-quarter results play out, we recommend prospective investors to wait and watch how BMY wades through these challenges before turning positive.
For investors already owning the stock, staying invested would be a prudent move. The company’s attractive dividend yield is a strong positive.
You can see the complete list of today’s Zacks #1 Rank stocks here.