Last update on 2024-06-06

Bristol-Myers Squibb (BMY) - Piotroski F-Score Analysis for Year 2023 (Final Score: 7/9)

Bristol-Myers Squibb (BMY) Piotroski F-Score 2023: Financial health at 7/9, reflecting strong profitability, liquidity, and asset efficiency.

Short Analysis - Piotroski Score: 7

We're running Bristol-Myers Squibb (BMY) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

The Piotroski F-Score is used to determine if a company has a strong financial position based on 9 factors related to profitability, liquidity, and operational efficiency. Bristol-Myers Squibb (BMY) scored 7 out of 9, indicating good overall financial health. Key positive findings include positive net income, strong cash flow from operations, increasing ROA, operating cash flow higher than net income, a growing current ratio, decreasing outstanding shares, and growing asset turnover. However, the leverage ratio has increased and the gross margin has decreased, which are areas of concern.

Insights for Value Investors Seeking Stable Income

Bristol-Myers Squibb shows a generally strong financial position with a Piotroski F-Score of 7, suggesting it is a potentially attractive stock for investors. The company performs well in terms of profitability, cash flow, and operational efficiency. However, potential investors should be cautious about the increasing leverage and declining gross margin. If you are considering this stock, it would be wise to keep an eye on these metrics and conduct further research before making a decision.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of Bristol-Myers Squibb (BMY)

Company has a positive net income?

Check if the Netincome of 8025000000 in 2023 is positive or negative as this determines if Bristol-Myers Squibb is profitable.

The Netincome of BMY in 2023 is $8,025,000,000, indicating profitability. Therefore, 1 point is added. Historical data shows volatility, with a low of -$9,015,000,000 in 2020. Nonetheless, the return to a solid positive figure recently is promising.

Company has a positive cash flow?

The Cash Flow from Operations (CFO) indicates the amount of cash a company generates from its regular operating activities, excluding any financing or investment-related cash flows. It is an essential indicator of a company's operational efficiency and its ability to generate sufficient cash to sustain and grow its operations. Evaluating whether the CFO is positive reflects the company's core profitability and financial health.

For Bristol-Myers Squibb (BMY), the Cash Flow from Operations (CFO) for 2023 is positive, registering at $13.86 billion. This is a strong indicator of the company's ability to generate liquid assets through its core activities, adding 1 point to the Piotroski score. Additional data reveals a steady upward trend in BMY's CFO over the past 20 years, with significant growth from $3.51 billion in 2003 to the current $13.86 billion in 2023. This positive trend underscores the company's consistently improving operational efficiency and robustness in cash generation from its primary operations. This trend is advantageous for stakeholders, as it indicates lasting operational strength and financial stability.

Return on Assets (ROA) are growing?

Change in ROA stands for change in Return on Assets. It measures the growth in profitability relative to the company's assets.

Bristol-Myers Squibb (BMY) reported a Return on Assets (ROA) of 0.0836 for 2023, showing an improvement from the 2022 ROA of 0.0614. The increase adds 1 point for BMY under the Piotroski scoring framework. This upward trend is positive, highlighting improved profitability. Historical data shows varied ROA, with recent figures suggesting recovery and better asset utilization compared to the last two decades where BMY's ROA hovered around the industry median of 0.7483.

Operating Cashflow are higher than Netincome?

The Operating Cash Flow criterion examines if a company's operating cash flow exceeds its net income. This indicates solid cash generation capabilities, a sign of financial health.

For Bristol-Myers Squibb (BMY) in 2023, the operating cash flow is $13.86 billion, noticeably higher than the net income of $8.025 billion. This results in a positive score (1 point), reflecting favorable cash generation efficiency. Over the past 20 years, BMY has exhibited a generally growing trend in operating cash flow, peaking in several recent years, contrasting the more volatile net income fluctuations. This consistency in generating cash flow is beneficial, reducing risks associated with earnings manipulation and highlighting operational robustness.

Liquidity of Bristol-Myers Squibb (BMY)

Leverage is declining?

Change in leverage measures the company's debt level relative to its assets and is crucial for assessing financial risk and solvency.

The leverage for Bristol-Myers Squibb has decreased from 0.3751 in 2022 to 0.4013 in 2023. Thus, leverage has increased. Over the last 20 years, the firm's leverage fluctuated, peaking at 0.415 in 2020 and reaching its lowest of 0.1614 in 2018, indicating mixed effectiveness in managing its financial risk. However, the increase in 2023 reveals added financial risk, as higher leverage implies a greater burden of debt compared to its assets.

Current Ratio is growing?

Analyzing the change in Current Ratio for Bristol-Myers Squibb (BMY) helps in assessing the company's ability to cover its short-term liabilities with its short-term assets. An increase in the Current Ratio is generally viewed positively as it indicates enhanced liquidity.

Bristol-Myers Squibb's Current Ratio has increased from 1.2459 in 2022 to 1.4271 in 2023, signifying improved liquidity. This positive trend grants the company 1 point under the Piotroski Analyses. Examining the historical data, BMY's Current Ratio has fluctuated over the past 20 years. Notably, the current ratio in 2023 (1.4271) is near the historical range's median, aligning with the industry's average trend (1.2749 in 2023). This reflects financial stability and efficient short-term asset management.

Number of shares not diluted?

Change in Shares Outstanding refers to the number of shares that a company has available for trading in the open market, which includes both public and restricted shares.

The Outstanding Shares for Bristol-Myers Squibb (BMY) have decreased from 2.13 billion in 2022 to 2.069 billion in 2023, signifying a reduction of 0.061 billion shares or approximately 2.86%. Initially, the outstanding shares increased consistently till 2020 as a result of various business decisions such as acquisitions or to raise capital. However, from 2021 onwards, it is evident from the data that BMY has started to decrease the number of outstanding shares. This trend is generally perceived positively as it often indicates share buyback initiatives, where a company repurchases its shares from the marketplace, reducing the number available for trading. This can enhance shareholder value, as with fewer shares available, the earnings per share (EPS) can increase. For the Piotroski Analysis, this criterion gets 1 point.

Operating of Bristol-Myers Squibb (BMY)

Cross Margin is growing?

The change in gross margin indicates the company's efficiency in managing its production costs. An increasing margin suggests better operational efficiency.

Bristol-Myers Squibb's (BMY) gross margin decreased from 0.7804 in 2022 to 0.7624 in 2023, reflecting a negative trend. This decrease indicates a decline in the company's ability to manage production costs efficiently, resulting in no additional point according to the Piotroski criterion. Historical data shows fluctuations: the gross margin peaked at 0.7857 in 2021 but showed a downward trend recently. The industry median for 2023 stands at 0.7176, implying BMY's gross margin, despite the decline, still exceeds the industry standard.

Asset Turnover Ratio is growing?

Change in asset turnover reflects whether a company is utilizing its assets more efficiently to generate revenue. An increased ratio indicates improved efficiency.

Comparing the Asset Turnover of 0.4689 in 2023 to 0.4479 in 2022, we observe an increase in 2023. This means Bristol-Myers Squibb (BMY) has utilized its assets more efficiently to generate revenue in 2023, adding 1 point for this criterion. Reviewing the historical asset turnover data, BMY's ratio has generally declined over the past two decades, from 0.7983 in 2003 to a low of 0.317 in 2019. However, the recent uptick in Asset Turnover demonstrates an improving trend, making this a positive development for the company's operational efficiency.