BMY

We rate BRISTOL MYERS SQUIBB CO (BMY) as a Buy with a composite score of 66.1/100 at a current price of $61.64. The stock scores above average across the majority of our six quantitative factors and ranks #235 out of 7,333 stocks in our universe, reflecting a favorable risk-reward profile.

The rating is primarily driven by strength in stability (88th percentile) and value (85th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (30th percentile) and momentum (55th percentile) tempers our overall conviction. We assign a Narrow Moat rating (56/100), Medium uncertainty, and Standard capital allocation.

Key items to watch: balance sheet deleveraging progress. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

BRISTOL MYERS SQUIBB CO holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 66.1/100 places it at rank #235 in our full 7,333-stock universe. With a $90.6B market capitalization, BRISTOL MYERS SQUIBB CO operates at meaningful scale within the Manufacturing sector, providing competitive advantages in distribution, procurement, and customer reach.

Revenue is growing at 0%, though momentum at the 55th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 73% (+30.6pp vs sector) narrow to operating margins of 20% (+18.8pp vs sector) and net margins of 15.2%, yielding a gross-to-net conversion rate of 21%. This conversion rate is typical for the sector, suggesting a standard cost structure without notable efficiency advantages or disadvantages.

At a current price of $61.64, BRISTOL MYERS SQUIBB CO appears undervalued relative to its fundamentals. Our value factor score of 85/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The stock screens as attractively priced on a majority of these measures, suggesting the market may be underappreciating the underlying fundamentals.

The stock currently trades at a P/E of 17.2x (a 23% discount to the sector median of 22.3x), EV/EBITDA of 17.7x (at a premium), P/B of 6.7x, P/S of 2.6x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a Medium uncertainty rating to BRISTOL MYERS SQUIBB CO. The stock presents a balanced risk profile: significant leverage (242% debt-to-equity) and low beta of 0.34 — while defensive, this may indicate limited upside participation in bull markets. While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.

Specific risk factors that inform our assessment include: significant leverage (242% debt-to-equity); low beta of 0.34 — while defensive, this may indicate limited upside participation in bull markets. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 88th percentile and quality factor at the 71th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 73% provide a buffer against cost pressures; above-average stability (88th percentile) suggests predictable business dynamics; large-cap scale ($90.6B) provides resilience. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate BRISTOL MYERS SQUIBB CO's capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 38.8%, and the balance sheet is managed within acceptable parameters (D/E: 242%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; BRISTOL MYERS SQUIBB CO falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. The 5.53% dividend yield provides some income return, but the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, BRISTOL MYERS SQUIBB CO receives a Buy rating with a composite score of 66.1/100 (rank #235 of 7,333). Our quantitative framework assigns a Narrow Moat (56/100, trend: stable), Medium uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 66/100.

Our analysis supports a constructive view on BRISTOL MYERS SQUIBB CO. The combination of identifiable competitive advantages, medium uncertainty, and standard capital allocation creates a risk-reward profile that favors accumulation at current levels. We recommend investors consider adding this name to portfolios aligned with the stock's risk profile.