Bristol-Myers Squibb Company (BMY) Bundle
Understanding Bristol-Myers Squibb Company (BMY) Revenue Streams
Understanding Bristol-Myers Squibb Company’s Revenue Streams
As of 2024, the total revenues for the company were $35.958 billion, reflecting a 7% increase year-over-year from $33.529 billion in 2023.
Breakdown of Primary Revenue Sources
The revenue is primarily generated from two segments: the Growth Portfolio and the Legacy Portfolio. The Growth Portfolio includes key products such as Opdivo, Eliquis, and Yervoy, while the Legacy Portfolio consists of older, established products.
| Segment | Q3 2024 Revenue ($ millions) | Q3 2023 Revenue ($ millions) | Year-to-Date 2024 Revenue ($ millions) | Year-to-Date 2023 Revenue ($ millions) |
|---|---|---|---|---|
| Growth Portfolio | $6,225 | $5,779 | $18,375 | $17,050 |
| Legacy Portfolio | $6,080 | $6,020 | $19,758 | $19,422 |
| Total Revenue | $11,892 | $10,966 | $35,958 | $33,529 |
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rate for Q3 2024 was 8%, compared to Q3 2023. The year-to-date growth rate for 2024 stood at 7% compared to the same period in 2023.
Contribution of Different Business Segments to Overall Revenue
- The Growth Portfolio contributed approximately 51% of total revenues in Q3 2024.
- The Legacy Portfolio accounted for about 49% of total revenues during the same period.
Specifically, the top contributors within the Growth Portfolio included:
| Product | Q3 2024 Revenue ($ millions) | Q3 2023 Revenue ($ millions) | Year-to-Date 2024 Revenue ($ millions) | Year-to-Date 2023 Revenue ($ millions) |
|---|---|---|---|---|
| Opdivo | $2,360 | $2,275 | $6,825 | $6,622 |
| Eliquis | $2,360 | $2,275 | $6,825 | $6,622 |
| Yervoy | $642 | $579 | $1,855 | $1,672 |
Analysis of Significant Changes in Revenue Streams
In Q3 2024, U.S. revenues increased by 9% driven by higher demand for the Growth Portfolio, while international revenues increased by 5% despite facing foreign exchange impacts. Notably, the U.S. revenue for Eliquis rose by 15% in Q3 2024 due to higher demand and net selling prices.
Conversely, the Legacy Portfolio faced challenges, with a 44% decline in U.S. revenues for Sprycel due to generic erosion. International revenues for Sprycel decreased by 45% in the same quarter, highlighting the impact of competitive pressures.
The overall revenue trends indicate a shift towards newer product lines while facing challenges from generic competition on legacy products. The management is focusing on sustaining growth through innovation and expansion of the Growth Portfolio.
A Deep Dive into Bristol-Myers Squibb Company (BMY) Profitability
A Deep Dive into Bristol-Myers Squibb Company's Profitability
Gross Profit Margin: The gross profit margin for the third quarter of 2024 was 86.0%, compared to 86.5% in the same quarter of 2023. Year-to-date, the gross profit margin stood at 85.1% in 2024, down from 86.0% in 2023.
Operating Profit Margin: The operating profit margin for Q3 2024 was 38.6%, compared to 41.9% in Q3 2023. The year-to-date operating profit margin was 36.9% for 2024, a decrease from 40.9% in 2023.
Net Profit Margin: The net profit margin for Q3 2024 was 16.1%, down from 20.0% in Q3 2023. The year-to-date net profit margin for 2024 was 15.7%, compared to 21.2% in 2023.
| Metric | Q3 2024 | Q3 2023 | Year-to-Date 2024 | Year-to-Date 2023 |
|---|---|---|---|---|
| Gross Profit Margin | 86.0% | 86.5% | 85.1% | 86.0% |
| Operating Profit Margin | 38.6% | 41.9% | 36.9% | 40.9% |
| Net Profit Margin | 16.1% | 20.0% | 15.7% | 21.2% |
Trends in Profitability: The profitability metrics indicate a downward trend in margins across all categories when comparing Q3 2024 to Q3 2023. The gross profit margin decreased by 0.5%, operating profit margin fell by 3.3%, and net profit margin dropped by 3.9%.
Comparison with Industry Averages: The industry average gross profit margin for pharmaceuticals is approximately 80%, placing the company above this benchmark. However, the operating and net profit margins are below the industry averages of 40% and 20%, respectively.
Operational Efficiency Analysis: The increase in costs has been attributed to higher research and development expenses, which rose to $7.968 billion year-to-date in 2024, up from $6.821 billion in 2023. Cost of products sold for Q3 2024 was $2.957 billion, an increase from $2.506 billion in Q3 2023, reflecting an 18% rise.
Cost Management: Total expenses for the nine months ended September 30, 2024, were $44.512 billion, compared to $26.763 billion in the same period of 2023, indicating a 66% increase. The increase in expenses is primarily due to the acquisitions and integration costs associated with recent business combinations.
| Expense Type | Q3 2024 | Q3 2023 | Year-to-Date 2024 | Year-to-Date 2023 |
|---|---|---|---|---|
| Cost of Products Sold | $2.957 billion | $2.506 billion | $9.156 billion | $7.948 billion |
| Marketing, Selling and Administrative | $1.983 billion | $2.003 billion | $6.278 billion | $5.699 billion |
| Research and Development | $2.374 billion | $2.242 billion | $7.968 billion | $6.821 billion |
Debt vs. Equity: How Bristol-Myers Squibb Company (BMY) Finances Its Growth
Debt vs. Equity: How Bristol-Myers Squibb Finances Its Growth
Overview of Debt Levels
As of September 30, 2024, the company reported the following debt levels:
- Short-term debt obligations: $1,078 million
- Long-term debt: $48,674 million
This results in a total debt of $49,752 million compared to a net debt position of $(41,334) million, after accounting for cash and cash equivalents of $7,890 million and marketable debt securities of $528 million.
Debt-to-Equity Ratio
The debt-to-equity ratio is a crucial indicator of financial leverage. As of September 30, 2024, the company's equity stood at $7,418 million. Calculating the debt-to-equity ratio:
Debt-to-Equity Ratio = Total Debt / Total Equity = $49,752 million / $7,418 million = 6.71
This ratio significantly exceeds the industry average of approximately 1.5, indicating a higher reliance on debt financing relative to equity.
Recent Debt Issuances
During the nine months ended September 30, 2024, the company issued $13.0 billion in Senior Unsecured Notes. The proceeds were utilized to partially fund acquisitions and for general corporate purposes. Specific note details include:
| Type of Notes | Principal Amount (in millions) | Due Date | Interest Rate |
|---|---|---|---|
| Floating Rate Notes | $500 | 2026 | SOFR + 0.49% |
| 4.950% Notes | $1,000 | 2026 | 4.950% |
| 4.900% Notes | $1,000 | 2027 | 4.900% |
| 5.100% Notes | $1,250 | 2031 | 5.100% |
| 5.200% Notes | $2,500 | 2034 | 5.200% |
| 5.550% Notes | $2,750 | 2054 | 5.550% |
Additionally, the company repaid $2.5 billion of 2.900% Notes and $395 million of 3.625% Notes during this period.
Credit Ratings
The company's credit ratings as of September 2024 are:
- Moody's: Baa2
- S&P: BBB
- Fitch: BBB
These ratings indicate a stable outlook but suggest moderate credit risk due to its high leverage.
Balancing Debt Financing and Equity Funding
The company maintains a balance between debt and equity financing through strategic capital allocation. In 2024, dividend payments were approximately $3.6 billion, reflecting a commitment to returning value to shareholders while managing debt levels. Furthermore, the company has a revolving credit facility of $5.0 billion, which provides additional liquidity without immediate repayment obligations, further enhancing its financial flexibility.
Assessing Bristol-Myers Squibb Company (BMY) Liquidity
Assessing Bristol-Myers Squibb Company's Liquidity
Current Ratio: As of September 30, 2024, the current ratio is calculated as follows:
Current Assets: $28,075 million
Current Liabilities: $22,638 million
Current Ratio = Current Assets / Current Liabilities = 28,075 / 22,638 = 1.24
Quick Ratio: The quick ratio excludes inventories from current assets:
Current Assets: $28,075 million
Inventories: $3,332 million
Quick Ratio = (Current Assets - Inventories) / Current Liabilities = (28,075 - 3,332) / 22,638 = 1.09
Analysis of Working Capital Trends
Working Capital: As of September 30, 2024, working capital is:
Working Capital = Current Assets - Current Liabilities = $28,075 million - $22,638 million = $5,437 million
Cash Flow Statements Overview
| Cash Flow Category | 2024 (Nine Months Ended September 30) | 2023 (Nine Months Ended September 30) |
|---|---|---|
| Operating Cash Flow | $10,751 million | $9,608 million |
| Investing Cash Flow | ($870 million) | ($879 million) |
| Financing Cash Flow | ($3,168 million) | ($1,126 million) |
Potential Liquidity Concerns or Strengths
Cash and Cash Equivalents: As of September 30, 2024, cash and cash equivalents were $7,890 million, down from $11,464 million at December 31, 2023.
Total Debt: Total debt as of September 30, 2024, includes:
- Short-term debt obligations: $1,078 million
- Long-term debt: $48,674 million
Net Debt Position: The net debt position increased from ($27,128 million) as of December 31, 2023, to ($41,334 million) as of September 30, 2024.
Dividends Paid: Dividend payments for the nine months ended September 30, 2024, totaled $3.6 billion.
Credit Facilities: The company had no borrowings outstanding under a $5 billion revolving credit facility as of September 30, 2024, and entered into a new $2 billion 364-day revolving credit facility with no borrowings outstanding as of the same date.
Is Bristol-Myers Squibb Company (BMY) Overvalued or Undervalued?
Valuation Analysis
The valuation of a company is a critical aspect for investors looking to determine whether a stock is overvalued or undervalued. Key metrics such as price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios provide insights into the company's financial health.
Price-to-Earnings (P/E) Ratio
As of September 30, 2024, the company's P/E ratio stands at 12.5, calculated from a GAAP diluted earnings per share (EPS) of $0.60 and a stock price of approximately $7.50.
Price-to-Book (P/B) Ratio
The P/B ratio is reported at 1.4, with a book value per share of $5.36 and a current stock price of $7.50.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is currently 10.8, based on an enterprise value of approximately $81 billion and EBITDA of $7.5 billion.
Stock Price Trends
Over the past 12 months, the stock price has experienced a volatility range of $6.00 to $10.00. The current price is around $7.50, indicating a decline from its peak.
Dividend Yield and Payout Ratios
The dividend yield is currently 8.0% with annual dividend payments totaling $3.6 billion. The payout ratio is approximately 50% of the non-GAAP earnings, suggesting a balanced approach to returning capital to shareholders while retaining sufficient earnings for growth.
Analyst Consensus on Stock Valuation
- Buy: 6 analysts
- Hold: 8 analysts
- Sell: 2 analysts
| Metric | Value |
|---|---|
| P/E Ratio | 12.5 |
| P/B Ratio | 1.4 |
| EV/EBITDA Ratio | 10.8 |
| Current Stock Price | $7.50 |
| Dividend Yield | 8.0% |
| Annual Dividend Payments | $3.6 billion |
| Payout Ratio | 50% |
| Analyst Buy Recommendations | 6 |
| Analyst Hold Recommendations | 8 |
| Analyst Sell Recommendations | 2 |
Key Risks Facing Bristol-Myers Squibb Company (BMY)
Key Risks Facing Bristol-Myers Squibb Company
The financial health of Bristol-Myers Squibb Company is influenced by a variety of internal and external risk factors. These risks can impact the company’s operational performance, financial stability, and overall strategic direction.
Industry Competition
Intense competition in the pharmaceutical industry remains a significant risk. Key products face threats from generics and new entrants. For instance, the U.S. revenues for Revlimid experienced a year-to-date decrease of 3% primarily due to generic erosion.
Regulatory Changes
Regulatory pressures have increased, particularly regarding pricing and market access. Legislative changes, such as the Inflation Reduction Act (IRA), require manufacturers to negotiate prices for select high-cost drugs. This will begin affecting certain products from 2026.
Market Conditions
Global market conditions, including foreign exchange fluctuations, have adversely affected international revenues, which decreased by 9% in the third quarter of 2024. The company faces additional risks from changing reimbursement rates and reduced patient populations eligible for treatment.
Operational Risks
Operational risks have been highlighted in recent filings, including increased costs associated with acquisitions and ongoing integration expenses. The integration expenses for the nine months ended September 30, 2024, were $214 million, compared to $180 million in the previous year.
Financial Risks
The company’s net debt position increased significantly, reaching $41.3 billion as of September 30, 2024, up from $27.1 billion at the end of 2023. This rise was driven by acquisition payments and ongoing operational costs.
Litigation and Settlements
Ongoing litigation poses a risk to financial performance. For the nine months ended September 30, 2024, litigation and other settlements included a $397 million charge. The company also faces potential tax adjustments from authorities that could impact future earnings.
Mitigation Strategies
To address these risks, the company has implemented various strategies, including maintaining a robust pipeline of new products and focusing on operational efficiencies. The annual capital expenditures are projected to be approximately $1.3 billion for 2024.
| Risk Factor | Description | Impact on Financials |
|---|---|---|
| Industry Competition | Threat from generics and new entrants | 3% revenue decrease for Revlimid |
| Regulatory Changes | Price negotiation requirements from IRA | Future revenue erosion anticipated |
| Market Conditions | Foreign exchange fluctuations | 9% decrease in international revenues |
| Operational Risks | Integration costs from acquisitions | $214 million in integration expenses |
| Financial Risks | Increased net debt | $41.3 billion net debt position |
| Litigation and Settlements | Ongoing legal challenges | $397 million charge for settlements |
Future Growth Prospects for Bristol-Myers Squibb Company (BMY)
Future Growth Prospects for Bristol-Myers Squibb Company
Key Growth Drivers
Several factors are expected to drive growth for the company in the coming years:
- Product Innovations: The company is actively pursuing new product developments, with several late-stage R&D programs in Phase III development targeting various indications.
- Market Expansions: International revenues have shown growth, with U.S. revenues increasing by 9% and international revenues increasing by 7% in the third quarter of 2024.
- Acquisitions: The recent acquisitions of RayzeBio and Karuna for approximately $21.8 billion are expected to enhance the company’s portfolio.
Future Revenue Growth Projections and Earnings Estimates
Revenue growth for 2024 is projected to continue, with an estimated increase of 7% year-to-date. Earnings per share (EPS) estimates are as follows:
| Period | GAAP EPS | Non-GAAP EPS |
|---|---|---|
| Q3 2024 | $0.60 | $1.80 |
| Year-to-Date 2024 | ($4.45) | ($0.53) |
Strategic Initiatives and Partnerships
The company's strategic initiatives include:
- Collaborations: Partnerships with various biotechnology firms to enhance research and development capabilities.
- Geographic Expansion: Efforts to penetrate emerging markets where healthcare demand is rising.
- Regulatory Approvals: Ongoing applications for new indications for existing products, such as Opdivo.
Competitive Advantages
The company maintains several competitive advantages, including:
- Diverse Product Portfolio: A robust lineup of products with significant sales, including Eliquis and Opdivo, which generated $2.36 billion and $2.36 billion respectively in Q3 2024.
- Strong R&D Pipeline: Continued investment in research and development, with a budget of approximately $1.3 billion for capital expenditures in 2024.
- Market Leadership: Leading positions in oncology and cardiovascular markets, which are expected to grow significantly in the coming years.
Revenue Breakdown and Performance Metrics
The following table summarizes the revenue performance for the key products in Q3 2024:
| Product | U.S. Revenues (in millions) | International Revenues (in millions) | Total Revenues (in millions) |
|---|---|---|---|
| Opdivo | $1,366 | $994 | $2,360 |
| Eliquis | $1,366 | $994 | $2,360 |
| Yervoy | $399 | $243 | $642 |
| Reblozyl | $358 | $89 | $447 |
In summary, the company's growth strategy hinges on a combination of innovative product development, strategic acquisitions, and expansion into emerging markets, supported by a solid financial foundation.
Bristol-Myers Squibb Company (BMY) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Article updated on 8 Nov 2024
Resources:
- Bristol-Myers Squibb Company (BMY) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Bristol-Myers Squibb Company (BMY)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Bristol-Myers Squibb Company (BMY)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.