RBC Capital has opened coverage on Bristol-Myers Squibb Co. with a Sector Perform recommendation and a $60.00 price target. At the time of the note, the shares were trading at $61.60, which places the market price above RBC’s initial target after a roughly 31% increase in the stock over the past six months.
The bank characterizes the recent rerating of Bristol-Myers Squibb from about 7x to 10x forward earnings per share as driven more by macro dynamics, valuation shifts and positioning ahead of several 2H26 catalysts than by a fundamental derisking of the business. The shares presently change hands at a price-to-earnings multiple of 17.78x and show a free cash flow yield of 10% by RBC’s metrics.
RBC’s initiation references InvestingPro analysis that still considers the company undervalued at current levels and notes that seven analysts have recently increased their earnings estimates. The firm also singles out Bristol-Myers Squibb’s Phase 3 slate as among the largest in the large-cap pharmaceutical cohort.
Pipeline highlights - RBC lists a set of late-stage and near-term assets it believes may not be fully priced into the stock. These include:
- milvexian, being studied for stroke and atrial fibrillation;
- Cobenfy, targeting Alzheimer’s psychosis;
- admilparant, for idiopathic pulmonary fibrosis;
- CELMoDs as a program class;
- Sotyktu, being explored for psoriatic arthritis and systemic lupus erythematosus.
RBC describes these programs as potentially underappreciated by the market and suggests that pipeline outcomes will be key to altering the stock’s valuation trajectory.
Risk-reward and catalysts - The analyst house views risk and reward as balanced at the current share price. It argues that further multiple expansion would likely require demonstrable pipeline success to compensate for approximately $30 billion of sales at risk from loss of exclusivity through 2030. RBC expresses cautious optimism that two of three primary catalysts will be delivered, while warning that material clinical setbacks could compress the multiple toward 7-8x forward earnings.
Recent company developments - Bristol-Myers Squibb reported fourth-quarter results that exceeded consensus. Revenue came in at $12.5 billion, 2.9% above the consensus estimate, and adjusted earnings per share were $1.26 versus a projected $1.14, a beat of 10.3%.
On the clinical front, the company said a Phase 2 trial of Reblozyl met its objectives in treating anemia in adults with alpha-thalassemia, documenting significant hemoglobin improvements and reductions in transfusion burden. Separately, the U.S. Food and Drug Administration accepted a new drug application for iberdomide, granting Breakthrough Therapy Designation and Priority Review, with an action date in August 2026.
Other analyst moves - Following the earnings report, Piper Sandler increased its price target to $75 while maintaining an Overweight rating. Barclays initiated coverage with a $75 price target, citing the company’s promising pipeline. Bernstein reaffirmed a Market Perform rating with a $58 target.
Taken together, these financial and clinical developments underscore ongoing efforts in drug development alongside the company’s recent financial performance. RBC’s initiation frames the current valuation as a balance between upside from the late-stage pipeline and the headwind of upcoming exclusivity losses.