Hey there, bargain hunter.

Here is a question worth sitting with: how does a company generate $11.5 billion in quarterly revenue, grow its newest drug portfolio by 12% year over year, and still trade at a forward earnings multiple that looks like a typo?

That is Bristol Myers Squibb right now. And most investors are not paying attention.

What the Market Sees

The bear case on BMY is real and well-rehearsed. Patent cliffs loom. Revlimid revenue is declining as generics eat into the franchise. Eliquis, the massive blood-thinner that accounts for billions in annual revenue, faces exclusivity pressure later this decade. The market has essentially priced BMY as a slow-motion revenue problem, and the stock has spent the better part of three years reflecting that pessimism.

Here is where it gets interesting.

The valuation already reflects most of that pessimism. BMY’s forward price-to-earnings ratio currently sits around 9.3x, against a trailing P/E of roughly 16x and a 10-year median closer to 20x. Its EV/EBITDA is under 8x. The peer average in large-cap pharmaceuticals runs roughly 21x earnings. That gap is not a rounding error. That is the market discounting a business well beyond what the fundamentals suggest is warranted.

What the Evidence Actually Shows

In Q1 2026, BMY reported $11.5 billion in revenue, up 3% year over year. More importantly, the growth portfolio, which includes newer drugs that are not facing near-term patent risk, jumped 12% to $6.2 billion and now accounts for more than half of total company revenue. Several individual drugs are accelerating sharply. Breyanzi, a cell therapy for blood cancers, was up 56% year over year. Camzyos, for obstructive hypertrophic cardiomyopathy, surged 97%. Reblozyl grew 16%.

Eliquis, the stock’s most debated asset, generated $4.14 billion in Q1 revenue alone, up 16% year over year. Management projected the drug could grow another 10% to 15% through 2026 despite ongoing Medicare pricing discussions.

And BMY is not sitting still on costs. The company is targeting roughly $2 billion in annual cost savings by 2027 through restructuring and productivity initiatives. Return on invested capital sits at approximately 21%. Return on equity is close to 39%. These are not the numbers of a broken business.

Slight tangent, but it matters: the broader healthcare sector has underperformed the S&P 500 significantly in 2025 and into 2026, with the healthcare ETF down more than 5% year to date while the index gained ground. That sector-wide pressure has dragged down quality names alongside the genuinely challenged ones. BMY is collateral damage, not a fundamentally impaired business.

Cheap, Broken, or Somewhere in Between?

This is the defining question. Value traps are real. A stock can look cheap while the underlying business deteriorates in ways the valuation never fully catches up to. BMY has real risks. Patent expirations are not hypothetical. The debt load is meaningful, with a debt-to-equity ratio above 2x. And the pipeline, while deep, has to deliver.

But the valuation already prices in a lot of failure. Simply Wall St’s discounted cash flow model estimates BMY’s intrinsic value at roughly $137 per share against a current price near $61. GuruFocus flags it as fairly valued at $55. The consensus analyst target sits around $62, implying modest near-term upside, but that estimate does not account for a re-rating of the multiple if the growth portfolio continues to outperform.

A dividend yield above 4%, a pipeline with multiple late-stage catalysts expected through 2026 and 2027, and an earnings multiple sitting well below both its own history and its industry peers: that combination does not usually describe a company in structural decline. It describes a company that has fallen out of favor for reasons investors have extrapolated too far into the future.

The bull case is not that BMY solves its patent problem overnight. It is that the market is pricing the company as though the growth portfolio does not exist, and that gap between perception and reality is where patient investors tend to find the best long-term entry points. Whether the catalyst is a strong earnings report on July 30, an FDA approval, or simply the slow grind of the growth portfolio taking over, the margin of safety here is unusual for a business of this quality.

Worth a closer look.

The Cheap Investor