DCF Studio

    BMY · NYQ · Healthcare

    Bristol-Myers Squibb Company

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 53.52

    Market price

    USD 63.02

    Implied upside

    -15.1%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedReported capital expenditure averages 2.60% of revenue against depreciation and amortisation of 18.04%. A business cannot depreciate more than it invests indefinitely. Capex has been set to 18.04% of revenue so the forecast is not handed free growth. The accounts do not separate depreciation from amortisation, so the combined charge is used - if a large part of it is amortisation of an acquisition, the reported capex is probably right and this substitution is not. Override it if the reported figure is right.

    Value Per Share

    Perpetuity growth
    USD 53.52-15.1%
    Exit multiple
    USD 55.21-12.4%
    Market price
    USD 63.02

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn4bn8bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 50.1bnUSD 48.7bnUSD 47.6bnUSD 46.8bnUSD 46.4bnUSD 46.3bnUSD 46.5bnUSD 47.0bnUSD 47.9bnUSD 49.1bn-0.2%
    EBITUSD 9.9bnUSD 9.6bnUSD 9.3bnUSD 9.2bnUSD 9.1bnUSD 9.1bnUSD 9.1bnUSD 9.2bnUSD 9.4bnUSD 9.6bn-0.2%
    NOPATUSD 8.1bnUSD 7.9bnUSD 7.7bnUSD 7.6bnUSD 7.5bnUSD 7.5bnUSD 7.5bnUSD 7.6bnUSD 7.7bnUSD 7.9bn-0.2%
    Add depreciation & amortisationUSD 9.0bnUSD 8.8bnUSD 8.6bnUSD 8.4bnUSD 8.4bnUSD 8.3bnUSD 8.4bnUSD 8.5bnUSD 8.6bnUSD 8.9bn-0.2%
    Less capital expenditureUSD -9.0bnUSD -9.0bnUSD -9.0bnUSD -9.1bnUSD -9.2bnUSD -9.4bnUSD -9.6bnUSD -9.9bnUSD -10.3bnUSD -10.8bn+2.0%
    Capex, % of revenue18.0%18.5%18.9%19.4%19.8%20.2%20.7%21.1%21.6%22.0%-
    Less increase in working capitalUSD -336.1mUSD 255.3mUSD 190.5mUSD 130.2mUSD 73.1mUSD 17.9mUSD -36.6mUSD -91.5mUSD -147.8mUSD -206.8m-5.3%
    Free cashflow to firmUSD 7.8bnUSD 7.9bnUSD 7.5bnUSD 7.1bnUSD 6.8bnUSD 6.5bnUSD 6.2bnUSD 6.1bnUSD 5.9bnUSD 5.8bn-3.2%
    Discount factor0.97040.91380.86060.81040.76320.71870.67680.63730.60020.5652-
    Present valueUSD 7.5bnUSD 7.2bnUSD 6.4bnUSD 5.7bnUSD 5.2bnUSD 4.7bnUSD 4.2bnUSD 3.9bnUSD 3.5bnUSD 3.3bn-
    Present Value Of The ForecastUSD 51.6bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.455Reported 0.186, pulled toward 1.0 (Blume)
    Cost of equity6.82%Risk-free + beta x equity risk premium
    Cost of debt5.44%Risk-free + 55bp, the spread for a AA rating at 7.3x interest cover. Book interest / average debt was lower, at 3.8%.
    Market capitalisationUSD 128.8bn73.2% of capital
    Total debtUSD 47.1bn26.8% of capital, book value as a proxy
    Tax rate17.7%Effective, capped at statutory
    WACC6.19%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 53.52

    65% of EV

    Forecast FCFF, final year
    USD 5.8bn
    Capex at depreciation, working capital in reinvestment
    USD 7.9bn
    Less reinvestment at g/ROIC (24.5% of NOPAT)
    USD -1.9bn
    Capitalised
    USD 6.0bn
    ROIC (reported)
    10.2%
    Terminal value, undiscounted
    USD 166.3bn
    Terminal value, discounted
    USD 94.0bn
    Enterprise value
    USD 145.6bn
    Less net debt
    USD 36.5bn
    Equity value
    USD 109.1bn

    Exit at 9.3x EBITDA

    Value per shareUSD 55.21

    65% of EV

    Terminal value, undiscounted
    USD 172.4bn
    Terminal value, discounted
    USD 97.4bn
    Enterprise value
    USD 149.0bn
    Less net debt
    USD 36.5bn
    Equity value
    USD 112.6bn

    Spread between methods: 3%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    4.19%95.72108.86130.11169.69267.41
    5.19%66.2170.9477.6487.63103.86
    6.19%49.2451.0753.5256.9161.74
    7.19%38.2238.8239.6440.7742.34
    8.19%30.4730.4930.5930.8031.15

    Outlined: this model. Green text: above today's price of 63.02. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year1.4%0.2%1.7%
    EBIT margin28.5%19.6%22.3%
    Discount rate-6.2%5.7%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.