Bristol Myers Squibb’s shares fell 4% despite beating estimates in Q2 with $12.3 billion in revenue and $1.46 adjusted EPS. Investors are cautious about Cobenfy’s future growth potential for treating schizophrenia. The upcoming late-stage trial data on Alzheimer’s psychosis patients will be crucial. Management remains optimistic about Cobenfy’s performance and sales growth. The company raised its 2025 full-year guidance, targeting $46.5 billion to $47.5 billion in sales, with a gross margin of 72% and operating expenses of $16.5 billion. Adjusted EPS is now expected to be $6.35 to $6.65, factoring in a 57-cent headwind from IPRD charges related to a new partnership. Despite a strong quarter, Bristol Myers remains a value trap until the trial data is released, prompting a hold-equivalent rating and a price target cut to $55 per share. President Trump’s pharmaceutical policy proposals, including tariffs, also contribute to sector-wide uncertainty. CEO Christopher Boerner highlighted Cobenfy’s strong performance and positive feedback from physicians. Sales growth was driven by newer drugs like Breyanzi, Reblozyl, and Camzyos. The company revised its guidance upwards due to better-than-expected performance from the growth portfolio and legacy portfolio, with Revlimid sales now expected to reach $3 billion. Foreign exchange dynamics will benefit the top line by $200 million, slightly lower than previously anticipated. Despite a reduced earnings guidance range of $6.35 to $6.65 per share, excluding the 57-cent IPRD charge impact, earnings would have been revised 22 cents higher. The company is also expecting $150 million more in royalty and interest income than previously forecast.

Read more at CNBC: We’re lowering our price target on Bristol Myers as two key overhangs persist