A lot of quality healthcare stocks offer investors long-term stability, good growth prospects, and even dividends. But $Bristol-Myers Squibb(BMY)$ doesn't quite meet all those criteria.
This healthcare stock has been facing some challenges recently, but now it might just be seeing the light at the end of the tunnel. With its undervalued status, this could be a long-term buying opportunity for contrarian investors.
The stock has fallen 30% in the past 12 months, thanks to its roughly $37 billion in long-term debt on the company's books in a high-interest rate environment, and the loss of patent protection for Eliquis, Opdivo and Revlimid in the coming years as sales slump.
In addition, BMY's revenue fell 3% last year to $45 billion, the second straight year of declines that investors worry could become a long-term trend.
But don't be too pessimistic, folks! The drugmaker is aggressively pushing forward with the development and launch of new drugs. In March 2023, the FDA granted accelerated approval for the T-cell therapy Breyanzi, which analysts predict could generate sales of over $2 billion. In August of that year, the FDA approved Reblozyl, a blood disease drug that is expected to be a blockbuster with peak sales of up to $4 billion.
According to BMY's predictions, by 2029, new products will contribute up to $25 billion, compared with 2023 new product revenue of only $3.6 billion.
With new products poised to help BMY get back on the growth track and the healthcare stock's valuation significantly lower, with a trailing P/E ratio of just 7, now might be the perfect time to strike!
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