Healthcare Business

Goldman Sachs Adds Pharmaceutical Giant to Conviction List of Top Stocks to Buy

With 2020 almost over and the new year just two short weeks away, many investors are resetting for what could be a volatile 2021. The ongoing trade issues and political conflicts with China, geopolitical instability in the Middle East and lingering questions over the November election results could continue to stir the pot some. While the rally off the March and September lows has been positive, it makes sense for investors to find the best possible stock ideas from the top analysts and firms.

One of Wall Street’s most respected lists of stocks is the Goldman Sachs Americas Conviction List. These are the firm’s top picks for high net worth and institutional accounts spread across 10 sectors. While these are absolutely the favorite ideas at Goldman Sachs, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

In a move that investors looking for more defensive ideas should applaud, the analysts add Bristol-Myers Squibb Co. (NYSE: BMY) to the Conviction List. The company is a global pharmaceutical company focused on discovering, developing, licensing and marketing chemically synthesized drugs or small molecules and biologics in various therapeutic areas, including virology comprising human immunodeficiency virus infection (HIV), oncology, neuroscience, immunoscience and cardiovascular.

The company’s products include the following:

  • Opdivo for anti-cancer indications
  • Eliquis, an oral inhibitor targeted at stroke prevention in adult patients with non-valvular atrial fibrillation, and the prevention and treatment of venous thromboembolic disorders
  • Orencia for adult patients with active RA and prostate-specific antigen, as well as reducing signs and symptoms in pediatric patients with active polyarticular juvenile idiopathic arthritis.

Just this week, Bristol-Myers reported that its wholly-owned subsidiary, Celgene, has settled litigation with Cipla related to patents for Revlimid. The settlement enjoins Cipla from marketing generic lenalidomide before the expiration of the patents-in-suit, except as provided for in the settlement. Celgene also has agreed to provide Cipla with a license to Celgene’s patents required to manufacture and sell certain volume-limited amounts of generic lenalidomide in the United States at some point after March 2022.

Shareholders receive a very reliable 3.13% dividend. Goldman Sachs raised the price target on the shares to $86 from $82. The Wall Street consensus target is $74.29, and Bristol-Myers stock closed trading on Tuesday at $62.57, up over 4% on the day.

We screened the Americas Conviction List and found four additional health care stocks that look like outstanding ideas for growth investors looking to initiate or increase holdings in the sector.