Bristol Myers SquibbBMY shares gained 3% following the company's third-quarter earnings release, closing at $62.48 on Oct. 30, as investors responded positively to its better-than-expected results.
Strong performance from BMY's Growth Portfolio was the primary driver of the third-quarter earnings and revenue beat, highlighting the increasing contribution of its newer products to overall performance.
The post-earnings rally helped the stock recover some of its recent losses.
Shares of the company have declined 4.5% in the past three months against the industry's growth of 10.9%. The stock has also underperformed the sector and the S&P 500 in this time frame.
BMY Underperforms Industry, Sector & S&P 500 Index
Image Source: Zacks Investment Research
Against this backdrop, an assessment of BMY's fundamentals, growth drivers, valuation and potential risks is warranted to determine whether the stock offers an attractive investment opportunity.
BMY's Growth Portfolio Drives Sustainable Top-Line Expansion
BMY's Growth Portfolio has emerged as the key contributor to its revenue expansion, comprising leading brands such as Opdivo, Opdivo Qvantig, Orencia, Yervoy, Reblozyl, Camzyos, Breyanzi, Opdualag, Zeposia, Abecma, Sotyktu, Krazati and Cobenfy. These products generated approximately 57% of the company's total revenues in the first nine months of 2026, highlighting their increasing importance to its overall business.
Opdivo Qvantig, Reblozyl, Camzyos, Breyanzi and Opdualag are among the portfolio's major growth contributors. Although sales of blockbuster cancer immunotherapy Opdivo dropped, largely reflecting the ongoing shift toward subcutaneous Opdivo Qvantig in the United States, strong demand for Qvantig across its approved tumor types is helping cushion the decline. Qvantig has now reached an annualized revenue run rate of more than $1.3 billion.
Opdualag continues to record healthy demand globally, benefiting from its established position as a leading first-line treatment option for melanoma in the United States. Reblozyl, developed in collaboration with MerckMRK, is also witnessing robust sales growth, driven by increasing adoption in the first-line treatment of anemia associated with myelodysplastic syndromes (MDS).
Breyanzi is strengthening its market presence, supported by its differentiated therapeutic profile and rising demand across approved large B-cell lymphoma indications in the United States and international markets.
Camzyos, Bristol Myers' cardiovascular drug, is gaining traction, driven by expanding prescriber base and increased penetration in community healthcare settings support adoption. The FDA recently approved Camzyos for symptomatic obstructive hypertrophic cardiomyopathy, covering adults and pediatric patients weighing at least 30 kg (66 lbs), to improve symptoms and functional capacity.
Cardiovascular drug Camzyos is seeing increased adoption, supported by promotional efforts, a growing base of new prescribers and deeper penetration in community settings. The FDA recently approved Camzyos for symptomatic obstructive hypertrophic cardiomyopathy to improve functional capacity and symptoms in adults and pediatric patients weighing 30 kg (66 lbs) or more.
Sotyktu is expanding Bristol Myers' immunology franchise following its approval in psoriatic arthritis, extending its commercial opportunity beyond plaque psoriasis.
Ongoing phase III programs in systemic lupus erythematosus and Sjögren's disease offer additional growth opportunities, with successful development potentially broadening Sotyktu's addressable market.
Cobenfy also offers long-term growth potential. Its encouraging initial commercial performance in schizophrenia, combined with the possibility of future label expansions, could gradually increase its contribution to Bristol Myers' overall revenues.
Taken together, the diverse product offerings within the Growth Portfolio provide multiple avenues for sustained revenue growth. Continued commercial success, coupled with progress in expanding indications, could help offset declining revenues from the Legacy Portfolio and strengthen the company's long-term growth prospects.
BMY's Legacy Portfolio Faces Continued Generic Headwinds
BMY's Legacy Portfolio remains under pressure from generic competition, with key drugs such as Revlimid, Pomalyst, Sprycel and Abraxane contributing to a 3% revenue decline in the first nine months of 2026.
The portfolio also includes Eliquis, which BMY co-developed with PfizerPFE. Strong, demand-led sales of Eliquis have helped cushion the impact of declining revenues from other legacy products facing generic competition, nearly offsetting their weakness.
However, Eliquis sales are expected to encounter headwinds in the fourth quarter as the drug approaches loss of exclusivity in Europe. BMY expects continued demand growth in the United States to partly mitigate this impact.
The company continues to project 20-25% revenue growth for Eliquis. Meanwhile, BMY has narrowed its full-year revenue decline forecast for the Legacy Portfolio to 3-5% from 4-6%.
BMY's Impressive Recent Pipeline Progress
BMY's recent pipeline progress strengthens its long-term growth prospects and could help offset pressure from its legacy portfolio.
The FDA recently granted accelerated approval to iberdomide, in combination with daratumumab and hyaluronidase-fihj and dexamethasone (ZDd), under the brand name Zenbexus, for adults with multiple myeloma who have received at least one prior line of therapy. Zenbexus is the first FDA-approved cereblon E3 ligase modulator (CELMoD), representing a novel class of cereblon-modulating protein degraders for multiple myeloma.
BMY also has a new drug application under FDA review for investigational CELMoD mezigdomide, in combination with carfilzomib and dexamethasone. The application has a target action date of May 13, 2027.
The company's late-stage pipeline has gained momentum, with positive results from four registrational studies announced over the past two months. These include Zenbexus, admilparant in idiopathic pulmonary fibrosis (IPF), RYZ101 in gastroenteropancreatic neuroendocrine tumors (GEP-NETs) and arlo-cel in relapsed/refractory multiple myeloma.
Admilparant met the primary endpoint at the 60-mg dose in the phase III IPF study, with a favorable safety and tolerability profile, supporting its potential as a first-in-class treatment. The company plans to discuss the findings with regulators and expects phase III results in progressive pulmonary fibrosis (PPF) in the first quarter of 2027. PPF represents an additional commercial opportunity.
RYZ101, an actinium-based radiopharmaceutical therapy, demonstrated a clinically meaningful PFS benefit in GEP-NET patients whose disease progressed following lutetium-based treatment. The results mark the first positive phase III data for an alpha-emitting targeted radiopharmaceutical therapy. Bristol Myers is engaging with the FDA on the next steps toward a regulatory submission.
Successful development and commercialization of these candidates could provide a meaningful boost to BMY's top-line growth and strengthen its long-term revenue prospects.
BMY's Valuation & Estimate Revision
Going by the price/earnings ratio, BMY is inexpensive as of now. Shares currently trade at 9.59x forward earnings, higher than its mean of 8.78x but lower than the large-cap pharma industry's 20.06x.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 EPS has dipped to $6.47 from $6.51 in the past seven days, while that for 2027 has increased to $6.52 from $6.50.
Image Source: Zacks Investment Research
Stay Invested in BMY Stock
Bristol Myers' performance is benefiting from strong momentum across its Growth Portfolio, led by Opdivo Qvantig, Reblozyl, Camzyos, Breyanzi and Opdualag.
The company's pipeline also offers encouraging long-term growth prospects. Recent positive clinical results for admilparant and RYZ101, along with progress in Zenbexus and mezigdomide, could expand BMY's presence across multiple therapeutic areas. Successful development and commercialization of these candidates could provide additional support to revenue growth.
The company's decision to raise its 2026 revenue guidance following its third-quarter results signals a favorable near-term operating outlook.
However, declining adjusted margins and substantial acquired IPRD charges weighed on profitability and prompted a reduction in earnings guidance.
Generic competition continues to weigh on legacy drugs, including Revlimid, Pomalyst, Sprycel and Abraxane. Although strong Eliquis demand has helped cushion the decline, the upcoming loss of exclusivity in Europe is expected to create additional headwinds. Mixed earnings estimate revisions also warrant caution.
Against this backdrop, a cautious investment stance appears appropriate. New investors may prefer to wait for more attractive entry points, while existing shareholders could consider holding their positions, supported by a dividend yield of approximately 4%.
BMY currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Bristol Myers Squibb Company (BMY) : Free Stock Analysis Report
Pfizer Inc. (PFE) : Free Stock Analysis Report
Merck & Co., Inc. (MRK) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
