Bristol-Myers Squibb Company (NYSE:BMY) and Eli Lilly and Company (NYSE:LLY) are almost opposites in the pharmaceutical market. One is trying to replace revenue from aging blockbusters, while the other is struggling to keep pace with demand for its newest ones. Yahoo Finance’s most recently available valuation statistics show that Bristol Myers trades at 9.36 times forward earnings, against 24.39 times for Lilly. This means that investors are paying more than two-and-a-half times as much for each dollar of Lilly’s forecast earnings.
The tempting conclusion is that Bristol Myers is cheap and Lilly expensive. However, their earnings suggest a more useful question to keep in mind, which focuses on how much confidence investors should place in profits that already exist, compared with profits dependent on continued extraordinary growth. Let’s get into it.
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Bull Case
Eli Lilly and Company (NYSE:LLY) has earned much attention in the GLP-1 market. Second-quarter revenue rose 48% to almost $23 billion, while non-GAAP EPS increased 33%. Mounjaro brought in $9.9 billion in fiscal Q2 2026, and Zepbound $4.9 billion. Those two medicines alone produced nearly two-thirds of quarterly sales, which makes Lilly a company that is already collecting considerable revenue from its two popular medicines and not asking shareholders to wait for a promising performance in the obesity market. One of the most watched competitions in the obesity market is between Lilly and Novo Nordisk. Read more about how their investment cases compare to each other in our insightful article on Can Eli Lilly Catch Novo Nordisk in the Oral GLP-1 Race?.
Lilly also raised annual revenue guidance to $85 billion–$87 billion. A broader pipeline could extend the runway, with the company stating that management plans to seek US approval for investigational retatrutide in early 2027. Neither a future approval nor its commercial value is assured, but Lilly’s current earnings already demonstrate the scale against which those possibilities must be judged.
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Bristol Myers has a less celebrated achievement. Its Growth Portfolio increased 15% to approximately $7.6 billion in the second quarter, accounting for around 58% of total revenue. That means the portfolio intended to support its future is already larger than the collection of older products it must eventually replace. The company also raised full-year revenue guidance to $49 billion–$50 billion, and also raised its non-GAAP EPS range to $6.75 to $7.00.
At a much lower forward multiple, the market is not demanding Lilly-like growth from Bristol Myers. Its valuation makes the effectiveness of the revenue transition, rather than the possibility of explosive new demand, the more relevant question. Which other big-name stocks does the financial media favor? Access our complete list here for free.
Bear Case
But before we dive further into BMY’s investment story, take a look at our recently published article on AbbVie (ABBV) vs Bristol Myers (BMY): Which is a Better Stock to Buy? for better comparative insight.
BMY’s discount has a basis in its results. Its Legacy Portfolio declined 4%, with Revlimid revenue falling 49%. A growing newer portfolio is encouraging, but declining older products absorb some of that progress before it reaches consolidated sales. Overall revenue increased only 6%, far below Lilly’s pace.
There is an earnings-quality complication, too. Bristol Myers reported a 40% increase in non-GAAP EPS, but its prior-year quarter included a net acquisition-related research and development charge of $0.57 per share, compared with a $0.01 positive impact in the latest period. The change in those items accounts for a notable chunk of the entire reported EPS increase, and treating 40% as underlying earnings acceleration would overstate what the comparison proves.
Lilly’s own rapid growth is not costless. Second-quarter volume increased 60%, partially offset by a 13% decline in realized prices. Strong unit demand is more than compensating for lower prices today, but revenue growth cannot be extrapolated indefinitely without considering that trade-off. And with Mounjaro and Zepbound contributing nearly 65% of sales, Lilly’s performance is concentrated in a pair of closely related medicines.
Conclusion
The valuation gap is not a simple choice between growth and value. Eli Lilly and Company (NYSE:LLY) has extraordinary commercial momentum but a multiple that requires continued strong earnings delivery. Bristol-Myers Squibb Company (NYSE:BMY) has a lower hurdle embedded in its P/E, alongside clear evidence that its replacement portfolio still has work to do. The revealing comparison is how much of each company’s future earnings growth must materialize to justify what shareholders are paying today.
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This article is originally published at Insider Monkey.
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