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Bristol-Myers Squibb Company (BMY) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Bristol-Myers Squibb Company (BMY)

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Intrinsic Value (DCF)

Current$56.62
→
Intrinsic$243.19
+330%
$155.97$243.19$416.48
Market implies 1% growth for 5 years
DCF analysis suggests BMY could have 330% upside at 25% growth — verify assumptions match your view.
At $57, the market prices in only 1% growth — below historical 25%, suggesting low expectations.
Range: Bear $156 → Bull $416. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →21%23%25%27%
8%$314$341$370$400
10%$206$224$243$263
12%$150$163$177$191
14%$115$125$136$147

Bull Case

  • Bull case ($416) offers 636% upside at 30% growth, 8% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (1%) ≤ historical CAGR (25%)

Bear Case

  • Bear case ($156) with 20% growth, 12% discount rate
  • Using 25% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$17.43B
Year 2$21.78B
Year 3$27.23B
Year 4$34.04B
Year 5$42.55B
Terminal$674.22B

📐 Model Inputs

Growth Rate25.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$13.94BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is BMY stock undervalued or overvalued?
🟢 UNDERVALUED

BMY trades at $56.62 vs. our DCF-derived intrinsic value of $159.03, implying +192% upside. At a 9.5% WACC and 25.0% projected FCF growth, the market appears to be underpricing the present value of BMY's future cash flows. The bear case ($99.93) still suggests upside, providing margin of safety.

What is BMY's intrinsic value?

Using a 5-year DCF model: Base FCF of $13.94B, projected at 25.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 9.5% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $40.85B net debt and dividing by 2.03B shares: Bear $99.93 | Base $159.03 | Bull $245.67. Current price $56.62 implies +192% to base case.

How is BMY's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 25.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=9.5%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($363.22B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 26.1x.