Bristol-Myers Squibb’s Valuation after Its 4Q17 Earnings
Bristol-Myers Squibb’s valuation
Headquartered in New York City, Bristol-Myers Squibb’s (BMY) product portfolio includes cardiovascular products, immunoscience products, neuroscience products, oncology products, and virology products.
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The chart above compares the revenues and earnings per share (or EPS) for Bristol-Myers Squibb since 1Q16. Bristol-Myers Squibb reported EPS of $0.68 on revenues of $5.4 billion during 4Q17.
PE (price-to-earnings) multiples represent what one share can buy for an equity investor. On February 9, 2018, Bristol-Myers Squibb (BMY) traded at a forward PE multiple of ~18.8x compared to the industry average of 13.4x.
Among BMY’s competitors, Eli Lilly (LLY), Pfizer (PFE), and Johnson & Johnson (JNJ) are trading at lower forward PE multiples of 15.5x, 11.8x, and 16.1x, respectively, compared to Bristol-Myers Squibb.
On a capital structure–neutral and excess cash-adjusted basis, Bristol-Myers Squibb (BMY) traded at a forward EV-to-EBITDA1 multiple of ~16.1x on February 9, 2018. This multiple is much higher than the industry’s average of ~10.9x.
Among BMY’s competitors, Eli Lilly (LLY), Pfizer (PFE), and Johnson & Johnson (JNJ) are trading at forward EV-to-EBITDA multiples of 12.4x, 10.3x, and 12.2x, respectively, compared to Bristol-Myers Squibb.
- enterprise value to earnings before interest, tax, depreciation, and amortization ↩