Bristol-Myers Squibb Co. (NYSE:BMY)

An analysis of the valuation ratios reveals a general trend of multiple compression across earnings and operating profit metrics, contrasted by significant volatility in book value and a recovery phase in sales multiples.

Price to Earnings (P/E) Ratio

A significant long-term decline is evident, starting from a peak of 25.64 in March 2022 and dropping sharply throughout 2023 to a low of 12.27 by December 2023. While there was a partial recovery in early 2025, reaching 18.29, the ratio entered another downward trajectory in 2026, ending at 14.27. This suggests a sustained reduction in the market's willingness to pay a premium for current earnings.

Price to Operating Profit (P/OP) Ratio

The P/OP ratio mirrors the P/E trend with a consistent downward trajectory. From a high of 20.32 in March 2022, the ratio decreased steadily to 13.53 by the end of 2023. Following a period of missing data in 2024, the ratio remained depressed through 2025 and 2026, eventually declining to 11.30. This indicates a systemic devaluation of the company's operating profitability over the observed period.

Price to Sales (P/S) Ratio

The P/S ratio experienced a contraction from 3.41 in early 2022 to a cyclical trough of 1.99 in March 2024. Subsequent to this low point, a gradual recovery trend is observed, with the ratio climbing back to 2.69 by June 2026. This suggests that while earnings multiples remained suppressed, the market began to revalue the company's revenue stream more favorably starting in mid-2024.

Price to Book Value (P/BV) Ratio

The P/BV ratio exhibited the highest level of volatility. After a steady decline from 5.07 in March 2022 to 3.35 in December 2023, there was a sharp and rapid increase in 2024, peaking at 6.98 by December 2024. This peak was followed by a period of fluctuation between 5.01 and 6.61 throughout 2025, before settling at 5.94 in June 2026. This pattern indicates significant shifts in the relationship between the market price and the company's underlying equity value.

Overall, the divergence between the declining earnings-based multiples (P/E and P/OP) and the recovering sales multiple (P/S) suggests a shift in valuation focus from bottom-line profitability toward top-line revenue generation. The erratic movements in the P/BV ratio further indicate instability in the company's asset-based valuation during the 2024-2026 period.

An analysis of the valuation metrics reveals a period of significant P/E compression followed by a period of earnings volatility and a subsequent recovery in share price and profitability.

Valuation Compression (March 2022 – December 2023)

A consistent downward trend in the P/E ratio is observed during this period, decreasing from 25.64 to 12.27. This contraction occurred despite a general increase in earnings per share (EPS), which rose from 2.94 to a peak of 4.07 in September 2023. The simultaneous decline in share price from 75.27 to 48.71 suggests a market re-rating of the company's valuation multiples regardless of the improving earnings performance.

Earnings Volatility and Valuation Gap (March 2024 – December 2024)

A severe downturn in profitability is evident throughout 2024, with EPS turning negative for four consecutive quarters, reaching a low of -4.41 in December 2024. Consequently, P/E ratios were not applicable during this interval. This period coincides with the lowest share price levels, with a bottom appearing around June 2025 at 43.31.

Recovery and Stabilization (March 2025 – June 2026)

Profitability returned to positive territory starting in March 2025, with EPS climbing from 2.66 to 4.54 by June 2026. The P/E ratio reappeared at 18.29 and experienced moderate fluctuations, ultimately ending at 14.27. While the share price recovered significantly to 64.86, the P/E ratio remained substantially lower than the levels seen in early 2022, indicating a lower sustained valuation multiple in the post-recovery phase.

The financial data reveals a period of significant volatility in both share price and operating performance, characterized by a substantial valuation contraction and a temporary collapse in profitability during 2024.

Share Price Trends

A consistent downward trajectory is observed from March 2022, where the share price stood at 75.27 US$, through March 2024, when it reached a low of 44.70 US$. Following this decline, the price exhibited a volatile recovery, peaking at 56.15 US$ in September 2024 before dipping again in early 2025. A strong upward trend emerged in the latter half of 2025 and through June 2026, with the price recovering to 64.86 US$.

Operating Profit Performance

Operating profit per share remained relatively stable between 3.60 US$ and 4.19 US$ from early 2022 through late 2023. However, a severe disruption occurred throughout 2024, with the company reporting negative operating profits ranging from -3.21 US$ to -3.69 US$. This negative phase was followed by a robust recovery starting in March 2025, with operating profit per share expanding steadily to reach 5.74 US$ by June 2026.

Price to Operating Profit (P/OP) Valuation

The P/OP ratio experienced a steady contraction during the initial period of analysis, declining from 20.32 in March 2022 to 13.53 by December 2023. Due to negative operating profits in 2024, the ratio was not applicable during that year. Upon the return to profitability in March 2025, the P/OP ratio resumed at 13.65 but continued to trend lower, reaching a minimum of 10.25 in June 2025. Despite the subsequent increase in share price, the valuation multiple remained compressed, ending at 11.30 in June 2026.

Overall, the data indicates that while the company successfully restored and grew its operating profitability by 2026, the market valuation as measured by the P/OP ratio did not return to 2022 levels, suggesting a fundamental shift in how the market prices the company's operating earnings.

The valuation profile of the equity demonstrates a significant period of multiple compression followed by a partial recovery in the Price-to-Sales (P/S) ratio between March 2022 and June 2026. This trajectory is primarily driven by volatility in the share price, as sales per share remained relatively stable with a modest upward trend throughout the period.

Share Price Volatility

A sustained downward trend in share price occurred from March 2022, when the price stood at 75.27, reaching a local minimum of 44.70 by March 2024. After a period of fluctuation, including a low of 43.31 in June 2025, the share price experienced a strong recovery, climbing to 64.86 by June 2026.

Sales per Share Stability

Revenue efficiency per share exhibited consistent and gradual growth. Starting at 22.06 in March 2022, the figure rose incrementally to 24.08 by June 2026. This steady increase indicates that the underlying revenue generation per share remained resilient despite the fluctuations in market valuation.

P/S Ratio Dynamics

The P/S ratio underwent a prolonged contraction, falling from 3.41 in March 2022 to a nadir of 1.85 in June 2025. This contraction reflects a decrease in the market's valuation of each dollar of sales. However, a recovery phase began in the latter half of 2025, with the ratio expanding to 2.69 by June 2026, signaling a return of investor confidence or a re-rating of the company's revenue streams.

The divergence between the steady growth in sales per share and the volatile share price highlights that the fluctuations in the P/S ratio were sentiment-driven rather than a result of fundamental revenue decline. The period concludes with a valuation multiple that is lower than the 2022 peak but significantly higher than the 2025 lows.

The Price-to-Book Value (P/BV) ratio exhibited significant volatility over the observed period, characterized by an initial phase of compression followed by a sharp expansion and subsequent fluctuations. This movement was driven by the diverging trajectories of the share price and the book value per share (BVPS).

Share Price Trends

A sustained downward trend in share price was observed from March 31, 2022, at 75.27 US$, reaching a trough of 44.70 US$ by March 31, 2024. Following this decline, the price entered a period of instability, recovering to 56.15 US$ in September 2024, dipping again to 43.31 US$ in June 2025, and finally trending upward to 64.86 US$ by June 30, 2026.

Book Value per Share (BVPS) Dynamics

BVPS remained relatively stable between 14.25 US$ and 15.37 US$ from March 2022 through December 2023. A significant structural decline occurred in the first quarter of 2024, where BVPS dropped abruptly to 8.13 US$. From March 2024 onward, a gradual recovery trend is evident, with the value climbing steadily to 10.93 US$ by June 30, 2026.

Price-to-Book Value (P/BV) Ratio Analysis

Between March 2022 and December 2023, the P/BV ratio declined steadily from 5.07 to 3.35, primarily tracking the reduction in share price while book value remained constant. A sharp reversal occurred in March 2024; despite the share price being near its lowest point, the simultaneous drop in BVPS caused the P/BV ratio to spike to 5.49. The ratio peaked at 6.98 in December 2024, reflecting a period where the market price recovered more rapidly than the book value. In the final period from March 2025 to June 2026, the ratio fluctuated between 5.01 and 6.61, ending at 5.94.