Bristol-Myers Squibb CompanyBMYNYSE

Overview Intelligence Charts News Fundamentals DCF Key Metrics TTM Financials Earnings Growth Rating Analysts Institutional Peers Historical

DCF Valuation

⚠️Model Warnings

•Revenue projections show 20% decline from peak. Analyst estimates may reflect secular headwinds or transition period.

DCF Valuation Summary

Strong Buy

Fair Value: $122.82 per share(market-calibrated)

+106.1%

Upside to Fair Value

Current

$59.58

Pure Model

$141.18

Fair Value

$122.82

Bull Case

$149.92

Bear Case

$137.01

Market Reality Check

Model Terminal Growth

3.00%

Market-Implied Growth

0.50%

Calibrated Growth

2.13%

Fair value uses 65% model / 35% market-implied terminal growth. Pure model: $141.18.

What's Driving This Ratingfor BMY

✓

CapEx already efficient

CapEx at 2.43% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

↑

Margin expansion modeled

Current EBIT margin is 13.98% — below the sector mature average of 26.34%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $7.1B (18.03% margin).

→

Moderate revenue growth

Analyst consensus projects -4.03% revenue growth, fading to 3.00% by Year 10. Revenue reaches $39.6B (vs $48.2B today).

🎯

Market pricing in lower growth than model

The market implies only 0.50% perpetual growth — 250bps below the model's 3.00%. This suggests the market sees headwinds or risks not in the model.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 81.03% indicates efficient cash generation. FCF reaches $11.7B by Year 10 (29.52% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)0.29

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)5.83%

Cost of Debt

Pre-tax Cost of Debt3.05%

Tax Rate24.36%

After-tax Cost of Debt2.31%

Equity Weight (E/V)72.07%

Debt Weight (D/V)27.93%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (72.07% × 5.83%) + (27.93% × 2.31%)

= 5.50%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$46.3B	$40.3B	$36.8B	$37.1B	$39.6B
EBIT	$6.5B	$5.6B	$5.1B	$6.0B	$7.1B
Tax	$1.6B	$1.4B	$1.3B	$1.5B	$1.7B
NOPAT	$4.9B	$4.3B	$3.9B	$4.5B	$5.4B
+ Depreciation	$8.5B	$7.4B	$6.8B	$6.8B	$7.3B
- Capex	$1.1B	$980M	$894M	$901M	$964M
- Δ NWC	-$57M	-$137M	-$8M	$8M	$34M
Free Cash Flow	$12.3B	$10.8B	$9.8B	$10.4B	$11.7B
Discount Factor	0.948	0.852	0.765	0.687	0.585
Present Value	$11.7B	$9.2B	$7.5B	$7.2B	$6.9B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$11.7B

Terminal Growth Rate3.00%

WACC5.50%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$482.1B

PV of Terminal Value$282.3B

Exit Multiple Method

Year 10 EBITDA$14.4B

Exit Multiple (EV/EBITDA)24.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$346.6B

PV of Terminal Value$202.9B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$82.5B

PV of Terminal Value$282.3B

Enterprise Value$364.8B

(-) Net Debt$36.9B

Equity Value$327.8B

Shares Outstanding2.0B

Price per Share$160.62

Exit Multiple Method

PV of Projected FCFs$82.5B

PV of Terminal Value$202.9B

Enterprise Value$285.4B

(-) Net Debt$36.9B

Equity Value$248.5B

Shares Outstanding2.0B

Price per Share$121.74

Pure Model Fair Value

$141.18

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	2.00%	2.50%	3.00%	3.50%	4.00%
3.50%	$181.49	$173.59	$166.06	$158.89	$152.04
4.50%	$154.30	$173.59	$166.06	$158.89	$152.04
5.50%	$120.94	$129.38	$141.18	$158.89	$152.04
6.50%	$100.33	$104.85	$110.66	$118.40	$129.25
7.50%	$85.76	$88.48	$91.80	$95.95	$101.29

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$137.01

129.9% vs current

• -25% vs analyst consensus
• Terminal growth: 2.5%
• Beta: 0.37

Base Case

$141.18

136.9% vs current

• Analyst consensus
• Terminal growth: 3.0%
• Beta: 0.29

Bull Case

$149.92

151.6% vs current

• +25% vs analyst consensus
• Terminal growth: 3.5%
• Beta: 0.30

Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Healthcare Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth-4.03%

Year 3 Revenue Growth-10.36%

Year 5 Revenue Growth-0.71%

Year 7 Revenue Growth0.78%

Year 10 Revenue Growth3.00%

Terminal Growth Rate3.00%

Margin & Efficiency

Current EBIT Margin13.98%

Terminal EBIT Margin26.34%

Tax Rate24.36%

Historical Capex / Rev2.43%

NWC / Revenue2.94%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 24x EV/EBITDA (Healthcare sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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