Is Bristol-Myers Squibb Company (BMY) overvalued?
On Equity Rank's model estimate, BMY trades 36% below its fair value. Bristol-Myers Squibb Company (BMY) last closed at $62.14; the multi-method model fair value is $97.88.
| Price | Model fair value | Price vs model |
|---|---|---|
| $62.14 | $97.88 | 37% below |
What the answer rests on
- 8 of 11 valuation methods put BMY's value above its price and 3 put it below, so the methods disagree.
- To justify today's price, BMY's free cash flow would need to grow about -10.6% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 2.4% a year.
- BMY trades at 14.2 times its last year's earnings, against a median of 29.6 for 14 profitable Drug Manufacturer companies.
- Over the past year the price sat below the model fair value on 100% of trading days. The gap ranged from 42% below to 31% below the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind BMY's fair value · What prices assume · Other companies