Bristol Myers Squibb vs. Novo Nordisk: Which Healthcare Stock Is a Better Buy in 2026?

Bristol Myers Squibb (NYSE:BMY) and Novo Nordisk (NYSE:NVO) are heading in opposite directions this year. Bristol Myers Squibb raised its 2026 revenue outlook in July, while Novo Nordisk expects its sales to be flat at best.

Bristol Myers Squibb focuses on oncology, hematology, and neuroscience, while Novo Nordisk is a leader in diabetes and obesity care. The stocks have followed their outlooks, with Bristol Myers Squibb shares up more than 35% over the past year and Novo Nordisk's down more than 30%.

The case for Bristol Myers Squibb

Bristol Myers Squibb discovers and sells prescription medicines for serious diseases, and its customers include large U.S. wholesalers. It's also adding direct-to-patient offerings, and in December 2025, it reached an agreement with the U.S. government that includes providing Eliquis free to the Medicaid program starting Jan. 1, 2026.

Revenue slipped 0.2% to $48.2 billion in fiscal 2025. Net income came to $7.1 billion, a turnaround from a net loss of $8.9 billion in 2024. Momentum has improved since. Second-quarter 2026 revenue rose 6% to $13.0 billion, led by 15% growth in the company's Growth Portfolio to $7.6 billion, and management raised its full-year revenue guidance to a range of $49.0 billion to $50.0 billion.

At the end of 2025, total debt equaled about 2.4 times shareholders' equity, and the current ratio was about 1.3. Free cash flow, which is operating cash flow minus capital expenditures, came to about $12.8 billion.

The case for Novo Nordisk

Novo Nordisk makes diabetes and obesity treatments, including the GLP-1 medicines Ozempic and Wegovy, and sells them across the U.S., Europe, and emerging markets. Novo Nordisk reports its results in Danish kroner, and the figures here are converted to U.S. dollars.

Revenue grew 6.4% to about $47.5 billion in fiscal 2025, and net income reached about $15.7 billion, a net margin of 33.1%. This year looks different. Novo Nordisk now expects 2026 adjusted sales to range from flat to down 6% at constant exchange rates, an improvement from the 4% to 12% decline it projected earlier in the year. Investors weren't won over by the long-term plans it laid out at its Capital Markets Day on Sept. 21, and the U.S.-listed shares fell nearly 8% that day.

At the end of 2025, borrowings were about 0.7 times shareholders' equity, and the current ratio was about 0.8, indicating that current liabilities exceeded current assets. Free cash flow came to about $4.5 billion after heavy spending on facilities and intangible assets.

Risk profile comparison

Bristol Myers Squibb faces government pricing pressure. Medicare's negotiated "maximum fair price" for Eliquis took effect Jan. 1, 2026, under the Inflation Reduction Act. The company also faces generic competition and patent disputes. Litigation over contingent value rights tied to its Celgene acquisition is moving forward, too. A federal court largely denied a motion to dismiss one suit in December 2025, and in August 2026, an appeals court revived an earlier suit that had been dismissed. Clinical trial failures and the complexity of manufacturing its cell therapies add further risk.

Novo Nordisk says it and Eli Lilly (NYSE:LLY) are the two largest companies by market share in diabetes and obesity treatments, and several other drugmakers have obesity medicines in development. U.S. pricing is another pressure point. Ozempic, Rybelsus, and Wegovy were selected for Medicare price negotiation, and their negotiated prices are scheduled to take effect Jan. 1, 2027.

Valuation comparison

Bristol Myers Squibb trades at a lower multiple of both forward earnings and sales than Novo Nordisk.

Valuation metrics include sourcing from Financial Modeling Prep (FMP) and may differ from other data providers.

Which stock would I buy in 2026?

Bristol Myers Squibb looks like the better buy to me, but its older drugs still face years of generic and pricing pressure, so its newer medicines have to keep carrying more of the load.

The case comes down to direction and price. Bristol Myers Squibb's Growth Portfolio is expanding fast enough to offset the decline of its older products, and management raised its outlook this summer. Novo Nordisk is heading in the opposite direction, with sales expected to be flat at best this year. Yet Bristol Myers Squibb trades at a lower multiple of forward earnings.

Novo Nordisk isn't broken. It still earns strong margins, and obesity is a large, long-lived market. But the stock's slide over the past year shows how quickly sentiment turns when growth stalls, and I'd want to see sales growth return before paying up.

Debt is the main trade-off. Bristol Myers Squibb carries more of it relative to equity, but its free cash flow was nearly three times Novo Nordisk's last year, so that load looks manageable.

For patient investors who own a diversified portfolio and plan to hold for years, Bristol Myers Squibb offers improving momentum at a modest price. Its Oct. 29 earnings report should show whether the Growth Portfolio can keep up the pace.

Mike Schwenk has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bristol Myers Squibb, Eli Lilly, and Novo Nordisk. The Motley Fool has a disclosure policy.