Bristol Myers Squibb vs. Eli Lilly and: Which Healthcare Stock Is a Better Buy in 2026?
2026-09-29 22:22
•Brendan Coffey •The Motley Fool
••••••• ••••• Axe Cap view
Eli Lilly Outpaces Bristol Myers Squibb for Growth in 2026
Despite Bristol Myers Squibb’s attractive value, Eli Lilly’s explosive growth and drug pipeline make it a stronger bet for 2026.
Bristol Myers Squibb (BMY) looks cheap on paper with a P/E around 14 and a nearly 4% dividend yield, but its flat revenue and high debt ratio suggest challenges ahead. Patent expirations linger like a shadow over future earnings. Eli Lilly (LLY), on the other hand, rides a powerful wave thanks to GLP-1 drugs like Mounjaro, which are redefining metabolic treatment. Its 45% revenue growth and promising pipeline, including Retatrutide, justify its rich valuation multiple of 40. For Johannesburg investors, this translates into a USD/ZAR play: a robust LLY reinforces dollar demand, keeping rand pressure in check. South African healthcare counters won’t capture this growth directly, so focus remains on managing rand exposure. If global growth slows or new competitors emerge, Lilly’s premium could falter, but for now, it’s the cleaner growth story. this is just our opinion and not financial advice
We would favor exposure to growth through USD/ZAR hedges rather than diversifying into local counters. Trim positions in rand-weak names if inflation or global rate rises intensify, and watch Castellum for indirect healthcare exposure. Avoid Bristol Myers at these levels.
- USD/ZAR
- LLY
- Patent cliffs hit Lilly’s pipeline unexpectedly
- Global dollar strength reverses, easing rand pressure
6/10
The article compares two pharmaceutical giants with divergent strategies: Bristol Myers Squibb, a deep-value dividend payer trading at cheap multiples (P/E 14.07) with flat revenue but stabilizing earnings, versus Eli Lilly, a high-growth juggernaut riding explosive success in GLP-1 metabolic drugs with 45% revenue growth and a P/E of 40.26. Despite BMY's attractive valuation, the author recommends LLY for 2026 due to its strong growth trajectory, successful drug pipeline including Retatrutide and lipoprotein(a) therapeutics, and forecast for 30% revenue growth.
Our take is based on reporting first published by The Motley Fool.