Our Bristol Myers Squibb Stock Pick Is Up 35%. It's Still a Good Bet in Healthcare. -- Barrons.com

By Dan Victor

Healthcare stocks have been a bright spot in the market this year.

Biopharmaceutical conglomerate Bristol Myers Squibb is up roughly 35% since we recommended buying shares nearly one year ago. That's a solid outperformance compared with the 24% gain over the same period in the State Street Health Care Select Sector SPDR ETF, which tracks the sector's leading companies within the S&P 500.

While a repeat of that explosive rally will be difficult to match in 2027, we're still bullish on Bristol Myers and see room for more upside. The stock continues to offer a compelling combination of growth momentum at an attractive valuation, trading at 10 times forward earnings.

Our original investment thesis was centered on the view that Bristol Myers was too cheap to ignore and that the market underappreciated the durability of its therapeutic portfolio. The company appears to be successfully navigating the loss of exclusivity in key products, including Revlimid, a treatment for multiple myeloma that lost patent protection in 2022. Even as competition from generics entering the market remains a headwind for several mature blockbuster drugs, accelerated adoption of newer products is driving top-line growth.

On Oct. 29, Bristol Myers posted third quarter revenue of $13.1 billion, an increase of 7% year over year. The growth portfolio, which includes its newer, patent-protected, high-margin commercial medicines and late-stage launch assets, delivered $7.7 billion in sales, up 12% from the prior year quarter. The portfolio now represents nearly 60% of total revenue.

Sales of the hematology cell therapy Breyanzi stood out, climbing 46% from last year with company management citing strong demand. Other growth drugs performing well include Camzyos in the cardiovascular segment, benefiting from expanded international insurance reimbursement coverage. Opdivo Qvantig, launched in 2025 as a subcutaneous formulation aimed at converting 30% to 40% of patients on the legacy intravenous Opdivo, generated $334 million in sales last quarter. Bristol Myers now has eight treatments generating over $1 billion in revenue on an annualized basis.

There is also some budding excitement toward the potential with Cobenfy, the newly-launched treatment for schizophrenia. Cobenfy has multibillion-dollar blockbuster potential as Phase 3 trials expand into Alzheimer's psychosis.

On the earnings call, CEO Christopher Boerner expressed confidence in an ongoing effort to diversify the commercial base with an extensive late-stage pipeline of clinical candidates. "We reported another quarter of double-digit growth in our growth portfolio and progressed our plans to derisk the pipeline to position the company for long-term success," he said.

Based on the stronger than expected results, Bristol Myers hiked its full year growth target and is now guiding for revenue between $49.75 billion and $50.25 billion, representing an annual increase of around 4% at the midpoint. Notably, that's well ahead of consensus forecasts closer to $44 billion in 2026 sales this time last year according to FactSet. The company is also guiding for full year earnings between $6.35 and $6.55 per share, around 5% higher than the $6.14 result in 2025.

JPMorgan analyst Chris Schott remains bullish, reiterating an Overweight rating on the stock after third quarter results. "We continue to view BMY shares as inexpensive with a favorable setup heading into several late-2026/early-2027 pipeline updates," he writes. Pending data readouts for programs such as Milvexian -- for stroke prevention and atrial fibrillation -- expected in the coming months could be a near term catalyst for the stock. Schott's price target of $73 implies approximately 18% upside over the next 12 months.

Investors can look forward to a potential dividend increase later this year. The stock currently yields 4.1% with a quarterly payout of $0.63 per share, backed by a 17-year streak of consecutive annual dividend increases. Additionally, Bristol Myers maintains an active $5 billion share buyback authorization, supported by robust cash flows and an investment-grade credit rating.

Overall, there are plenty of reasons to own the stock as a high-quality healthcare leader. As future quarterly results confirm that the growth franchise is scaling and the pipeline is advancing, Bristol Myers will be well-positioned to continue rewarding shareholders.

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November 12, 2026 04:17 ET (09:17 GMT)