Bristol Myers Squibb (BMY): The Best Quarter Before the Cliff | Q2 2026

Bristol-Myers Squibb Company (BMY) Q2 2026 — Revenue $12.973B (+6%, +5% ex-FX) beat consensus by ~$1.1B; non-GAAP EPS $2.04 vs $1.60 expected (+28%); GAAP EPS $1.62 vs $0.64. FY2026 guidance RAISED: revenue $46.0-47.5B to $49.0-50.0B (+$2.75B at the midpoint) and non-GAAP EPS $6.05-6.35 to $6.75-7.00. Growth Portfolio $7.560B (+15%, now ~58% of revenue). The stock rose 2.79% to $64.86 — a fresh 12-month high. Read management's own guidance bridge and the raise has only two components: Eliquis, whose FY26 growth guide jumped from 10-15% to 20-25%, and a legacy portfolio eroding more slowly than modelled (now -4% to -6%). Gross margin, tax rate and other income were all left unchanged; operating expense actually rose to $16.5B. So the raise is almost entirely the run-off book. Eliquis did $4.481B (+22%) and annualises near $17.5B — roughly 35% of total revenue — and it loses U.S. exclusivity on April 1, 2028. Part of the raise is mechanical: Eliquis was in the IRA's first Medicare negotiation round, and the $231 per 30-day maximum fair price took effect January 1, 2026 against a $521 list. Management stated that H2 U.S. sales benefit from the resulting elimination of the accumulated CPI penalty in certain government channels — the gross price fell, the net price BMS keeps rose. That is a one-time change in net realisation, not an extendable growth rate. Meanwhile consensus already models revenue falling to $36.7B and EPS to $4.77 by 2030, so at $64.86 you are paying 9.4x peak earnings but 13.6x the trough. THE CALL: HOLD (3/5, A GOOD QUARTER, MOSTLY PAID FOR) — base-case value ~$70.0 vs ~$64.86 today. KEY METRICS: - Revenue $12.973B +6% (+5% ex-FX); U.S. $8.991B +6%, int'l $3.982B +6% - Non-GAAP EPS $2.04 vs $1.46; GAAP EPS $1.62 vs $0.64; GAAP net income $3.317B vs $1.310B - Growth Portfolio $7.560B +15% (+14% ex-FX), ~58% of revenue; Legacy $5.422B -4% - Eliquis $4.481B +22% (U.S. $3.357B +27%); FY26 Eliquis guide raised 10-15% to 20-25% - Opdivo IV $2.485B -3%; Opdivo Qvantig $261M vs $30M, now a ~$1B run rate - Reblozyl $735M +29%, Breyanzi $484M +41%, Camzyos $416M +60%, Opdualag $349M +23%, Cobenfy $63M +81% - Revlimid $425M -49%, Pomalyst $204M -71%, Sprycel $88M -27%, Abraxane $55M -47% - Gross margin 71.3% GAAP / 71.4% non-GAAP, down ~120bps on mix; SG&A $1.826B +7% - R&D $2.959B GAAP +15% (PRV purchase + IPRD impairments); non-GAAP $2.316B +2% - Acquired IPRD $0 vs $1.508B a year ago; amortisation $437M vs $830M (-47%) - Q2 operating cash flow ~$3.4B (management); $1.2B of debt repaid in the quarter - Net debt $31.656B vs $34.043B at Dec 31; cash + marketable securities $11.464B - Dividend $0.63/qtr = $2.52/yr, 3.9% yield, ~38% of free cash flow; no buybacks - FY26 guide: revenue $49.0-50.0B, non-GAAP EPS $6.75-7.00, opex ~$16.5B, GM ~69-70%, tax ~18% - Eliquis U.S. exclusivity to April 1, 2028; ~$1.5-2B European step-down expected in 2027 - Consensus FY30: revenue $36.7B, EPS $4.77 — so 9.4x FY26 EPS but 13.6x the 2030 trough - Our DCF: bear $43 / base $74 / bull $104 at 8%; base is $93 at 7% and $61 at 9% What to watch: Bull trigger: milvexian. A Factor XI win on non-inferior efficacy with lower bleeding would let BMS replace its own cliff with its own drug, and fair value moves toward $90. Also watch the Cobenfy ADEPT readout landing in early 2027 as now guided. Bear confirmation: another ADEPT-style pipeline slip against a fixed April 2028 date; Eliquis decelerating hard in 2027 once the gross-to-net benefit anniversaries and the European step-down lands; Growth Portfolio momentum fading below 10%. We would be a buyer nearer $55 (about 8x earnings, 4.6% yield). Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.