Is Bristol Myers Squibb the Best Bargain in Big Pharma?

2 hours ago 3

Keith Speights, The Motley Fool

Mon, April 27, 2026 astatine 5:10 AM CDT 4 min read

Every American knows that healthcare isn't cheap. Healthcare costs proceed to rise. Some healthcare stocks are cheap, though, including the stocks of immoderate of the world's biggest drugmakers.

Bristol Myers Squibb (BMS) (NYSE: BMY) is 1 of them. To beryllium sure, BMS isn't the biggest pharma stock. Its marketplace headdress of astir $120 cardinal ranks it conscionable extracurricular the apical 10 largest drugmakers. But is BMS the champion bargain successful large pharma?

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A buying cart containing pills that's connected apical of $100 bills.

A speedy look astatine BMS's valuation metrics mightiness person you that this banal is simply a bona fide bargain. For example, the mean price-to-sales ratio for pharmaceutical companies is astir 4.4. BMS's shares commercialized astatine lone 2.5 times sales.

The company's bottommost enactment appears to shriek "bargain", too. BMS's guardant price-to-earnings ratio is simply a debased 9.4. The healthcare sector's mean guardant net aggregate is 17.3.

Some investors similar to usage endeavor worth (EV) to worth companies due to the fact that it accounts for debt. BMS's EV/EBITDA aggregate of 10.3 besides looks charismatic compared to astir different drugmakers. Lilly is super-expensive with its EV/EBITDA of astir 27. AbbVie (NYSE: ABBV), AstraZeneca (NYSE: AZN), and Johnson & Johnson (NYSE: JNJ) besides athletics overmuch higher EV-based multiples than BMS.

What astir a deeper dive into BMS's valuation? At slightest 1 discounted currency travel exemplary estimates that the pharma banal is importantly undervalued, with an upside of astir 40%.

BMS looks similar a worth banal from astir each angle. However, valuation metrics tin beryllium misleading. Specifically, astir of them don't relationship for a company's maturation prospects implicit the adjacent respective years. Unfortunately, BMS's maturation volition astir surely dilatory drastically.

The institution faces a daunting patent cliff. U.S. patents for humor thinner Eliquis and crab immunotherapy Opdivo expire successful 2028. Last year, Eliquis was BMS's top-selling drug, portion Opdivo ranked No. 2. Their combined income marque up astir fractional of the company's full revenue.

BMS won't person to hold until its apical 2 blockbusters suffer exclusivity to brushwood problems. Cancer drugs Abraxane, Pomalyst, Revlimid, and Sprycel person already mislaid patent exclusivity. The institution expects gross to alteration somewhat this twelvemonth compared to 2025.

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