Bristol-Myers Squibb Company (NYSE:BMY) looks cheaper than Pfizer Inc. (NYSE:PFE) on earnings, even though its latest revenue growth was stronger. That sounds like an easy valuation story until the profit figures enter the picture. Bristol Myers reported a 40% rise in second-quarter adjusted earnings per share, while Pfizer’s adjusted earnings were virtually unchanged. But those headline numbers conceal an accounting comparison that considerably narrows the apparent advantage.
At their October 9 closing prices of $59.12 and $28.28, respectively, Bristol Myers trades at about 9.36 times its forward earnings, against 9.67 times for Pfizer, according to the latest available estimates by Yahoo Finance. The difference is modest compared with the uncertainty surrounding how each company will replace weakening product revenue. But before we get into the investment case, we meticulously compiled a list of the best healthcare stocks to buy according to hedge funds. Check out the complete list here to make an informed decision.
Bull Case
Bristol Myers has progressed further than its low multiple might suggest. Its second-quarter revenue grew 6% to $13.0 billion, helped by a 15% increase in its Growth Portfolio to $7.6 billion. That portfolio now accounts for roughly 58% of quarterly revenue. Reblozyl increased 29%, Breyanzi 41%, and Camzyos 60%, providing several sources of momentum rather than a single hoped-for breakthrough.
Management raised its annual revenue outlook to $49 billion–$50 billion and adjusted EPS guidance to $6.75–$7.00. The increase is particularly relevant to valuation: Bristol Myers has not merely posted encouraging individual drug sales; it has revised its companywide financial expectations upward. We also crafted a list of the 12 Cheap Biotech Stocks to Buy Now through cumbersome research. Access the complete list here.
Pfizer Inc. (NYSE:PFE) also has growth that its headline revenue figure obscures. Revenue for fiscal Q2 2026 rose 3% to $15.0 billion, but revenue excluding Comirnaty and Paxlovid increased 5% operationally. Its launched and acquired products grew 18% operationally. The company also reported that Padcev rose 23%, Lorbrena 37%, and Eliquis 19%, all on an operational basis. These product categories differ from BMY’s Growth Portfolio and are not directly comparable.
Pfizer also raised the midpoint of its annual revenue outlook by $500 million to $61.5 billion. That suggests its non-COVID portfolio is contributing enough to improve expectations, even as its pandemic-related business continues to contract. Read more extensively about Pfizer’s bull and bear case through our insightful article on Pfizer Is Trading at Less Than 10 Times Earnings. But Is the Stock Actually Cheap?
Bear Case
For more insight into how investment stories for other popular healthcare stocks compare with one another, take a look at our insightful article on Gilead vs. Danaher: Which Healthcare Growth Story is More Convincing?
The important qualification for Bristol Myers lies in its spectacular-looking adjusted earnings growth. EPS increased from $1.46 to $2.04, but the earlier quarter included a $0.57-per-share net acquisition-related research and development charge, versus a positive $0.01 impact in the latest quarter. Removing those specific impacts leaves approximately $2.03 per share in both periods. That calculation does not strip out every possible earnings adjustment, but it shows why the reported 40% jump should not be mistaken for comparable underlying acceleration.
Its Legacy Portfolio also fell 4% to $5.42 billion. Revlimid declined 49%, and Pomalyst/Imnovid dropped 71%. Even a growing replacement portfolio must contend with substantial lost sales from older medicines.
Pfizer’s adjusted diluted EPS slipped to $0.77 from $0.78, despite higher reported revenue. Its updated guidance highlights the challenge, showing that an expected $1.5 billion improvement in non-COVID revenue was partly offset by a $1 billion reduction in anticipated COVID-product sales. The company maintained adjusted EPS guidance of $2.80–$3.00.
Conclusion
Bristol-Myers Squibb Company (NYSE:BMY) offers the lower guidance-based earnings multiple and faster reported quarterly sales growth. Pfizer Inc. (NYSE:PFE) shows encouraging expansion outside COVID products, but that progress has yet to produce much change in adjusted earnings. The striking point is that neither company’s headline EPS result fully captures its operating transition.
Putting the two stocks in comparison looks into how much growth remains after aging franchises, weaker product lines and accounting effects are considered, instead of merely declaring the lower multiple a bargain.
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This article is originally published at Insider Monkey.
