Concerns over high inflation, growing tensions regarding Ukraine, and the Federal Reserve’s decision to start raising interest rates in March 2022 have led the major benchmark indexes into correction territory. Although a rise in…
U.S. fourth-quarter GDP has helped the indexes rebound this week, experts expect the market correction to continue for some time.
Amid these conditions, it could be wise to bet on stocks that are trading at discounts to their peers despite outperforming the border market over the past few months. Investors’ preference for value stocks over growth stocks is evidenced by the Vanguard Value ETF’s (VTV) 2.8% returns over the past six months, versus the SPDR S&P 500 Trust ETF’s (SPY) 1.8% loss.
Bristol-Myers Squibb Company (BMY – Get Rating), Lockheed Martin Corporation (LMT – Get Rating), Cigna Corporation (CI – Get Rating), and Walgreens Boots Alliance, Inc. (WBA – Get Rating) look undervalued at their current price levels considering their growth prospects. These stocks have also outperformed the broader market over the past few months. So, we think it could be wise to bet on them now.
Bristol-Myers Squibb Company (BMY – Get Rating)
BMY develops, licenses, manufactures, and markets biopharmaceutical products worldwide. The New York City-based company offers products in hematology, oncology, cardiovascular, and therapeutic immunology classes and sells products to wholesalers, distributors, pharmacies, retailers, hospitals, clinics, and government agencies.
On Jan. 20, 2022, Japan’s Ministry of Health, Labour, and Welfare has approved BMY’s Abecma, a B-cell maturation antigen (BCMA)-directed chimeric antigen receptor (CAR) T cell immunotherapy for the treatment of adult patients with relapsed or refractory (R/R) multiple myeloma, who have received at least three prior therapies. Multiple myeloma remains an incurable disease, and many patients suffer through periods of remission and relapse. As the first CAR T cell therapy approved for its treatment in Japan, BMY is looking forward to seeing great demand for Abecma going forward.
BMY’s total revenues for its fiscal 2021 third quarter, ended Sept. 30, 2021, increased 10.3% year-over-year to $11.62 billion. The company’s non-GAAP gross profit came in at $9.43 billion, indicating an 11% rise from the prior-year period. Its non-GAAP EBIT was $5.29 billion, representing a 17.2% year-over-year improvement. While its non-GAAP net income increased 20.4% year-over-year to $4.50 billion, its non-GAAP EPS increased 22.7% to $2. It had $13.54 billion in cash and cash equivalents as of Sept. 30, 2021.
The $7.48 consensus EPS estimate for its fiscal 2021, ended Dec. 31, 2021, represents a 16.1% rise from the prior-year period. Analysts expect the company’s revenue to increase 9.3% year-over-year to $46.49 billion. It surpassed the consensus EPS estimates in three of the trailing four quarters. BMY’s EPS is expected to grow at a 5.7% rate per annum over the next five years.
The stock has gained 6.9% in price over the past three months. It closed yesterday’s trading session at $63.86. In terms of non-GAAP forward P/E, BMY is currently trading at 8.32x, which is 58.7% lower than the 20.15x industry average. The stock’s 8.50x forward Price/Cash Flow is 50.2% lower than the 17.08x industry average.
BMY’s POWR Ratings reflect its solid prospects. The stock has an overall A rating, which equates to Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
BMY has an A grade for Value and a B grade for Growth and Quality. In addition to the POWR Ratings grades we have just highlighted, one can see the ratings for BMY’s Sentiment, Stability, and Momentum here. BMY is ranked #13 of 182 stocks in the Medical – Pharmaceuticals industry.
Click here to checkout our Healthcare Sector Report for 2022
Lockheed Martin Corporation (LMT – Get Rating)
LMT is a security and aerospace company that researches, designs, develops, manufactures, and integrates and sustains technology systems, products, and services worldwide. The company operates through four segments: Aeronautics; Missiles and Fire Control; Rotary and Mission Systems; and Space. It also provides management, engineering, technical, scientific, logistics, and information services. LMT is headquartered in North Bethesda, Md.
On Jan. 27, 2022…
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