Should You Buy Bristol Myers Squibb While It Trades Below 10 Times Forward Earnings?
2026-10-25 21:15
•Reuben Gregg Brewer •The Motley Fool
••••• ••• Axe Cap view
Is Bristol Myers Squibb a Hidden Opportunity for Long-Term Investors?
BMY’s low forward P/E and solid dividend yield may offer value despite looming patent expirations.
Bristol Myers Squibb (BMY) trades at just under 10 times forward earnings, reflecting investor worries about upcoming patent losses for heavyweights like Opdivo and Eliquis. It’s an understandable concern—generic competition tends to eat into pharma profits fast. But those patent cliffs are baked into the valuation. For patient investors, this could be a classic value trap turned opportunity. BMY’s new drug pipeline looks promising, and it pays a generous 4.1% dividend that it’s raised consistently, which is unusual in the pharma world. The question is, are you willing to withstand some short-term earnings volatility for decent income and potential new growth? For South African investors, this is less about the JSE but something to watch via USD/ZAR, as a weaker rand could enhance the dollar-based dividend's value. If new drug approvals disappoint or generics hit harder than expected, the risk is real. But. this is just our opinion and not financial advice
Watch BMY for now but be ready to buy on dips if the rand remains stable or strengthens, as the dividend yield becomes more attractive in rand terms. Avoid chasing Lilly at its current premium.
- BMY
- USD/ZAR
- Delays or failures in drug pipeline
- Faster-than-expected erosion from generics
6/10
Bristol Myers Squibb trades at a low 9.7x forward P/E ratio due to upcoming patent expirations on blockbuster drugs Opdivo and Eliquis, which will face generic competition. However, the article argues this presents a buying opportunity for long-term investors, as patent losses are normal in pharma, the company has new drugs in development, and it offers an attractive 4.1% dividend yield with a strong history of dividend growth.
Our take is based on reporting first published by The Motley Fool.