Morgan Stanley Maintains Underweight Rating on Bristol Myers Despite Strong Q2 Results
Bristol Myers Squibb (BMY) reported strong second-quarter results with adjusted earnings per share of $2.04 and revenue of $12.97 billion, surpassing analyst expectations. The company raised its full-year guidance for both revenue and earnings. Despite the positive performance driven largely by Eliquis—a blood thinner in partnership with Pfizer—Morgan Stanley kept its Underweight rating on BMY stock and maintained a price target of $40 per share. The firm's cautious stance stems from concerns over Bristol Myers' reliance on older drugs like Eliquis, which is expected to lose U.S. patent protection soon. Morgan Stanley analyst Terence Flynn projected future earnings at around $5.72 per share for the period ending mid-2028 and applied a low multiple of 7x, significantly below both BMY's historical average and industry norms. The broader issue is that Bristol Myers faces an estimated $30 billion in revenue losses by 2030 due to expiring patents on key drugs. This looming challenge has led Morgan Stanley to discount the stock’s future earnings potential, signaling a lack of confidence in sustained growth.
