Is Bristol-Myers Squibb (BMY) Stock Undervalued Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company value investors might notice is Bristol-Myers Squibb (BMY). BMY is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 9.01 right now. For comparison, its industry sports an average P/E of 16.04. Over the last 12 months, BMY's Forward P/E has been as high as 14.36 and as low as 7.25, with a median of 10.04.
We also note that BMY holds a PEG ratio of 1.07. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. BMY's industry has an average PEG of 2.08 right now. BMY's PEG has been as high as 2.22 and as low as 0.76, with a median of 1.15, all within the past year.
We should also highlight that BMY has a P/B ratio of 2.72. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. BMY's current P/B looks attractive when compared to its industry's average P/B of 6.84. Over the past 12 months, BMY's P/B has been as high as 5.89 and as low as 2, with a median of 4.58.
Value investors will likely look at more than just these metrics, but the above data helps show that Bristol-Myers Squibb is likely undervalued currently. And when considering the strength of its earnings outlook, BMY sticks out at as one of the market's strongest value stocks.
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