Updated 4/11/25
Bristol-Myers Squibb (BMY) continues to evolve as it shifts from reliance on legacy blockbusters like Eliquis and Opdivo toward a new generation of therapies aimed at oncology, immunology, and cardiovascular disease. With a current yield of around 4.5% and a payout ratio just under 60%, the company offers meaningful income backed by strong free cash flow. Despite a recent earnings loss driven by acquisition costs and R&D spending, operating cash flow remains above $15 billion. Shares have pulled back from 2024 highs, opening the door for value-focused investors to step in at a discounted valuation. Management has maintained a long-term approach through pipeline development and measured capital allocation. While generic pressure poses risks, the company’s deep portfolio, strong cash generation, and steady dividend policy continue to support its investment case.
Recent Events
The past year has been a rollercoaster for BMY. While revenues moved in the right direction—up 7.5% compared to the prior year—the earnings side took a big hit. Net income dropped hard, showing a loss of nearly $9 billion over the trailing twelve months. That kind of decline looks harsh on paper, but the story’s more complex.
Much of that earnings dip came from non-recurring charges and increased R&D spending tied to acquisitions. When you zoom out and look at cash flow, which really drives the dividend narrative, things look healthier. Operating cash flow came in at $15.2 billion, with levered free cash flow topping $16.8 billion. That’s more than enough to cover the company’s dividend and still leave room for strategic spending.
The market’s response has been mixed. Shares have swung between $39 and $63 over the past 12 months. The current price hovers around $50, and that slide from last year’s highs has pushed the dividend yield above historical norms—catching the eye of dividend-focused portfolios.
Key Dividend Metrics 🧮💸📈🔒
🧮 Forward Dividend Rate: $2.48
💸 Forward Dividend Yield: 4.48%
📈 5-Year Average Yield: 3.52%
🔒 Payout Ratio: 59.84%
📆 Next Dividend Date: May 1, 2025
📉 Ex-Dividend Date: April 4, 2025
These numbers don’t lie. A forward yield near 4.5% is rare among large-cap pharma names, especially one with Bristol’s balance sheet and legacy. And with a payout ratio just under 60%, the company has left itself breathing room to either grow that payout or continue investing in its pipeline.
Dividend Overview
Bristol-Myers isn’t known for flashy moves, and that same philosophy shows up in its dividend strategy. The company has been a steady payer for years, opting for slow and sustainable increases rather than rapid-fire growth. That might not excite short-term traders, but for long-haul dividend investors, it’s music to the ears.
Right now, the yield is running significantly above the company’s five-year average. That’s partly due to the recent share price pullback, which has created a yield opportunity not often seen from BMY. While EPS has been rocky, especially in recent quarters, cash generation hasn’t wavered. With over $15 billion in operating cash flow last year, the dividend remains firmly supported.
What’s refreshing is that BMY isn’t stretching to maintain its dividend. Management has shown a willingness to align dividend growth with actual financial strength. It’s not about optics—it’s about delivering what the business can actually sustain.
Dividend Growth and Safety
Over the past ten years, BMY has quietly built up a respectable track record of dividend growth. It hasn’t been dramatic, but it’s been reliable. Even modest increases add up over time, especially when the starting yield is as high as it is now. Investors who prioritize a growing income stream over the long term will appreciate that approach.
The latest dividend hike brought the annual payout up to $2.48, and it’s set to go out in early May. That kind of consistency is reassuring in a space that can be prone to volatility. For anyone using dividends to help fund retirement or supplement income, this type of steady payout matters.
But let’s talk safety, because that’s where BMY gets a bit complicated. The company is sitting on $51 billion in debt—a big number, no doubt. The debt-to-equity ratio is through the roof at over 300%. But before sounding the alarm, it’s important to look at the bigger picture.
Bristol’s got nearly $11 billion in cash and continues to generate free cash flow in the double-digit billions. That’s more than enough to meet its obligations while continuing to reward shareholders. Plus, the company’s low beta of 0.41 tells us it doesn’t tend to swing wildly with the market. That’s a trait that dividend investors often favor, especially when looking for portfolio stability.
So while the debt levels may look daunting on the surface, BMY has the tools and track record to manage it effectively. For now, the dividend appears well-covered and secure, even in a complex financial backdrop.
Cash Flow Statement
Bristol-Myers Squibb generated $15.19 billion in operating cash flow over the trailing twelve months, reflecting a solid year of core business strength and consistency. Free cash flow followed closely at $13.94 billion, reinforcing the company’s ability to fund dividends, service debt, and maintain investment flexibility without tapping into reserves. This stable cash generation is key to sustaining shareholder returns, especially in a sector known for heavy R&D costs.
On the investing side, BMY reported an outflow of $21.35 billion, a sharp increase from previous years and largely tied to acquisitions and pipeline expansion. The company also leaned into the credit markets, raising $15.97 billion in new debt while repaying $5.87 billion. This capital movement reflects a more aggressive capital allocation strategy in 2024, likely geared toward growth. Despite this, the end-of-period cash balance landed at just over $10.3 billion, a healthy cushion that keeps the balance sheet manageable and the dividend well-supported.
Analyst Ratings
📉 Bristol-Myers Squibb has recently faced a wave of analyst downgrades, most notably from Goldman Sachs, which shifted its rating from Buy to Neutral while cutting its price target from $67 to $55. The downgrade reflects growing concern around the company’s near-term growth, particularly due to looming patent expirations for key revenue drivers like Eliquis, Opdivo, and Revlimid. These expirations introduce significant uncertainty, and while BMY has been proactive in building out its pipeline, analysts are hesitant about how quickly those new therapies can fill the revenue gap.
🧐 UBS echoed a similar tone by maintaining a Neutral rating but trimming its price target from $60 to $54. Their outlook remains cautious given the expected drop in exclusivity revenues, though they acknowledge BMY’s strategic steps in M&A and cost control. Meanwhile, Wells Fargo offered a slightly more constructive take, keeping its Equal Weight rating and nudging its price target up from $60 to $62. Their stance suggests a belief that the company’s diversification and cost efficiency efforts might be enough to keep things on track through the patent headwinds.
🎯 Across the board, analysts currently hold a consensus price target of around $57.67. That implies roughly 14% upside from current levels, pointing to a mix of caution and optimism depending on how well BMY can execute on its next growth phase.
Earning Report Summary
Solid Top-Line Growth
Bristol-Myers Squibb wrapped up the end of 2024 with better-than-expected revenue growth, pulling in about $12.3 billion for the fourth quarter. That’s an 8% increase from the same time last year, driven by continued demand for some of its biggest names like Eliquis and Opdivo. A good chunk of that growth also came from newer additions to the lineup, especially Reblozyl and Camzyos, which have been gaining traction in the oncology and cardiovascular spaces.
The newer products really helped lift the numbers, with the so-called growth portfolio bringing in $6.4 billion—up more than 20% compared to last year. While that’s great news on the innovation front, the flip side is the older drugs are feeling the heat. Products like Revlimid and Pomalyst saw declining sales due to generic competition, and that pressure isn’t going away anytime soon.
Profit Hit by Charges
Even with solid sales growth, the bottom line took a hit. Bristol-Myers posted a GAAP loss per share of $4.41 for the year. That drop came largely from big expenses tied to acquisitions and heavy R&D investments. On a more adjusted, non-GAAP basis, earnings came in at $1.15 per share, which helps paint a clearer picture of ongoing operations.
Looking to 2025, the company is setting expectations with projected revenue around $45.5 billion and adjusted earnings per share between $6.55 and $6.85. Those figures show they’re expecting some continued challenges—mainly from generics—but also reflect confidence in their newer therapies and pipeline.
One new drug that’s already showing promise is Cobenfy, a treatment for schizophrenia. It brought in $10 million in its first quarter on the market, which isn’t game-changing yet, but it’s a strong start for a launch that just got off the ground.
Bristol-Myers seems to be navigating the mix of old and new pretty carefully. While the earnings report came with a few financial bruises, it also highlighted some encouraging signs that the newer therapies could help support the business through the next wave of patent expirations.
Chart Analysis
Momentum and Moving Averages
Looking at the 1-year chart for BMY, the price had a solid run from mid-2023 through the first quarter of 2024. After bottoming out near the $39 mark in June, the stock climbed steadily, eventually hitting highs above $60 earlier this year. The upward slope of the 50-day moving average during that period confirmed the positive momentum. But things have shifted more recently.
In April, the price broke below both the 50-day and 200-day moving averages, a technical signal that typically reflects a change in trend. The 50-day average, which had been trending higher for months, has now begun to curve downward. That’s not a great sign for near-term strength, especially as the stock has moved swiftly back toward the $50 range. The 200-day average remains flat to slightly up, suggesting the longer-term structure isn’t broken yet—but it’s definitely being tested.
Volume and Relative Strength
Volume spikes have been noticeable during selloffs, especially in the most recent dip. That jump in trading activity hints at stronger distribution—likely some institutional movement out of the stock. Sustained volume increases on down days suggest caution, as it often means sellers are in control.
The RSI (Relative Strength Index) dipped below 30 recently, entering oversold territory. That typically suggests a bounce could be near, but context matters. If the broader trend is weakening, an oversold RSI might not lead to a strong recovery. Earlier in the chart, RSI repeatedly bounced off the 40–45 zone, but this latest drop was more aggressive, falling to levels not seen in over a year.
Overall, BMY’s price action is currently under pressure after a long climb, and while some technical support could be forming, the stock’s recent breakdown below moving averages and the sharp drop in RSI are worth watching closely.
Management Team
Bristol-Myers Squibb’s leadership has remained steady and focused, guiding the company through some meaningful changes in the pharmaceutical industry. The executive team has leaned into strategic acquisitions in recent years, expanding the company’s reach in oncology, immunology, and rare diseases. Many of those moves have carried short-term financial costs, but the focus has been on laying the groundwork for sustainable long-term growth.
Giovanni Caforio, who has led the company through the Celgene acquisition and subsequent integration, has emphasized both pipeline development and operational discipline. The broader leadership team has shown a consistent approach to capital allocation, maintaining a balance between reinvestment, dividend payouts, and debt management. What comes through clearly is a long-term mindset—they’re not chasing short-term numbers but working toward a stable base of future revenue from a more diversified mix of products.
Valuation and Stock Performance
Valuation has become a more compelling piece of the BMY story. With the stock trading at a forward price-to-earnings ratio below 8, it’s priced at a notable discount compared to many peers in the healthcare space. That low multiple reflects investor concerns over patent cliffs and revenue headwinds, but it also presents potential upside for those looking past the next few quarters.
The stock had a solid run through much of 2023, climbing from the $39 range up past $60. Since then, it’s pulled back sharply, settling closer to $50. While the price action has been choppy, the dividend yield has climbed in response, now hovering around 4.5 percent. For investors focused on steady income, that kind of yield from a large-cap pharma name is difficult to overlook.
Despite the recent retreat, BMY remains a relatively low-volatility name. Its beta is around 0.4, suggesting that it moves less than the broader market. That kind of stability, combined with a rising dividend, continues to make it an appealing option for more conservative portfolios.
Risks and Considerations
The clearest risk facing Bristol-Myers right now is the impact of expiring patents. Revlimid, Eliquis, and Opdivo have all been significant revenue generators, and as those protections fade, competition from generics is expected to increase. The company has worked to prepare for this by building out a strong pipeline and bringing new products to market, but there’s no guarantee those newer therapies will scale fast enough to fully offset the decline.
Another area to watch is debt. Following its acquisitions, the company’s total debt has grown to over $50 billion. While the cash flow has remained strong enough to manage those obligations, the balance sheet remains a key factor to monitor. Any hiccups in pipeline performance or regulatory delays could tighten that cushion.
New launches like Camzyos and Cobenfy offer growth potential, but execution is critical. It takes time to build awareness, secure reimbursement, and gain physician adoption. With the competitive landscape in oncology and immunology always shifting, Bristol-Myers will need to move quickly and strategically to capture share.
The broader regulatory environment is also worth keeping in mind. Drug pricing reforms, approval hurdles, and policy changes can all affect the outlook for pharma names, and while BMY tends to take a conservative stance, it’s not immune to changes in the healthcare landscape.
Final Thoughts
Bristol-Myers Squibb is in the middle of a transition period. The company has had years of strong performance backed by blockbuster drugs, but it now faces the challenge of maintaining that momentum with a new generation of therapies. The leadership team has stayed committed to reinvesting in innovation while continuing to return capital to shareholders, which speaks to a clear strategic direction.
The stock’s current valuation suggests that a lot of the known risks are already priced in. With strong free cash flow, a growing dividend, and a broad product pipeline, there are reasons to believe the company can manage this period of transition effectively. The yield is attractive, the cash flows are solid, and the potential for long-term upside remains if the next wave of products delivers as hoped.
While there are headwinds ahead, Bristol-Myers has the pieces in place to adapt. Its performance in the next couple of years will largely depend on how quickly new therapies gain ground and how efficiently the company navigates competition and regulatory shifts. It’s not without its risks, but it’s a name with the scale, cash flow, and leadership to weather near-term uncertainty and keep evolving.