Many top healthcare stocks offer investors long-term stability, promising growth prospects, and in some cases even a dividend.
However, investors do not seem convinced that Bristol Myers Squibb (NYSE:BMY) ticks all those boxes. The company faces some worrying challenges in the short term, but there is hope that it can return to growth in the long term.
For contrarian investors ready to try their luck on the healthcare company, there could be promising upside prospects, especially given its low valuation. Does Bristol Myers Squibb Stock Have the Potential to Make You a Millionaire?
What is it that has investors so worried?
Bristol Myers Squibb hasn’t convinced many investors lately. In fact, they have been downright bearish; Shares of the healthcare company have fallen 30% in the last 12 months alone.
It’s not hard to understand why investors aren’t so enthusiastic. It has about $37 billion in long-term debt on its books at a time of high interest rates. He also sees sales of major drugs Eliquis, Opdivo and Revlimid falling as they lose patent protection in the coming years. And in the case of Revlimid, it already faces competition from generics.
Revenue fell 3% last year to just over $45 billion, the second year in a row that revenue declined. The problem is that this could be the start of a longer-term trend. And, combined with the high debt level, that doesn’t paint a pretty picture for investors or give them much reason to buy the company’s stock.
Why the stock could be a tempting contrarian investment
The short-term outlook for Bristol Myers is indeed worrying. But the company does not remain indifferent. It’s doing what pharmaceutical companies always do: seeking to bring new products to market and expand their pipelines.
Over the past year, the company has obtained approvals from the Food and Drug Administration (FDA) for several drugs. In August 2023, regulators approved Reblozyl, a treatment for anemia in people who may need blood transfusions. It’s promising blockbuster drug it could generate $4 billion in sales at its peak.
In March, the FDA granted accelerated approval to Breyanzi, a T-cell therapy for the treatment of relapsed or refractory chronic lymphocytic leukemia or small lymphocytic lymphoma. This is another promising product, with sales predicted by analysts to exceed $2 billion.
Bristol Myers has even more in store and predicts that by 2029 its new products could generate up to $25 billion in revenue. In 2023, its new product portfolio generated a fairly modest $3.6 billion. So there is a lot more growth to come for the company in the coming years.
But could the stock become a millionaire maker?
If you’re optimistic that Bristol Myers Squibb can start growing its business again with its new products, there can clearly be a lot of upside to buying the stock today, especially at its discounted price. The shares are currently trading at an incredibly cheap futures price…
