The stock markets have been in the middle of a historic turmoil over the past weeks, and stocks across almost all sectors have been pummelled due to rapid selloffs. Corporate earnings have taken a beating, and investors have turned away from stocks despite the announcement of an unprecedented stimulus package from the United States government.
If the crisis continues, then investors would need to go for solid companies that can manage to weather the storm for a considerable period of time. Two companies that might be in a position to do so are the pharmaceutical major Bristol Myers Squibb and AstraZeneca. Hence, it might be worthwhile to take a closer look at both these companies.
AstraZeneca plc (NYSE:AZN)
Over the course of the past 12 months, AstraZeneca plc (NYSE:AZN) has gained 37%, and in 2020 so far, it has recorded gains of 5%. The latter figure is perhaps far more impressive, considering the carnage in the markets. The company’s fundamentals are very strong, and that is possibly the biggest reason behind the resilience displayed by its stock. It got 23 regulatory approvals in 2018, and currently, it was one of the best cancer and diabetes product portfolios.
Moreover, AstraZeneca is also going to produce plenty of late-stage reports over the course of the next two years. This has raised the possibilities of future growth, and the company has projected a 13.7% growth in 2021. It is one of the biggest projected growth rates among big-ticket pharma companies. Moreover, AstraZeneca recently announced that it does not plan to amend its annual projections in light of the coronavirus crisis. The stock is trading at 5.23 times forward sales, and it seems that the market has realized the value of the stock.
Myers Squibb Co (NYSE:BMY)
Trading at only thrice its estimated sales next year, Bristol-Myers Squibb Co (NYSE:BMY) is one of the cheapest stocks from among big-ticket pharmaceutical companies. Despite having delivered wins on the regulatory front in recent times, the stock has recorded a decline of 6% this year so far. The company got approval for its multiple sclerosis product Zeposia and it was also awarded two key approvals for Reblozyl, its blood disorder therapy product.
The main reason behind the decline in the Bristol stock is the declining sales of its product Opvido. That has affected investor sentiment in recent times. Bristol has projected decent growth in 2021, and hence, the Opvido issue might not be as big as investors might be thinking. Hence, Bristol might prove to be a clever play from investors who are looking for value in pharmaceutical stocks.