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The stock market still faces various geopolitical and economic issues, including supply chain problems and interest rate hikes in the U.S. and elsewhere that may impact corporations’ bottom lines. In this climate, stocks that look overvalued are more likely to suffer since investors tend to be quicker to sell off shares of such companies in times of downturns.

That’s why it is a good idea to turn to corporations that look reasonably valued. Let’s look at two stocks that fit the bill: Bristol Myers Squibb (BMY -0.62%) and Jazz Pharmaceuticals (JAZZ -2.94%).

BMY data by YCharts.

1. Bristol Myers Squibb

Bristol Myers Squibb is a prominent drugmaker that currently boasts a forward price-to-earnings (P/E) ratio of 9.6. That compares favorably to the pharmaceutical industry‘s average of 13.4. Is Bristol Myers undervalued for a good reason? The bulls might point to Bristol Myers’ cancer drug Revlimid, the company’s top-selling product last year, now facing generic competition in the U.S.

But let’s look at the other side of the argument. Bristol Myers still has several medicines with sales growing at a good clip. These include anticoagulant Eliquis and cancer drugs Pomalyst, Yervoy, and Opdivo. Bristol Myers’ revenue increased by a decent 5% year over year in the first quarter to $11.6 billion, despite Revlimid’s sales dropping by 5% year over year to $2.8 billion. True, some of Bristol Myers’ products will lose patent exclusivity in the coming years.

Eliquis’ patents will expire in 2026, while Yervoy’s will expire in 2025 in the U.S. and Japan and in 2026 in Europe.

Thankfully, Bristol Myers has enough pipeline programs to replace these medicines that will experience patent cliffs relatively soon. In April, the U.S. Food and Drug Administration (FDA) approved Bristol Myers’ Camzyos as a treatment for symptomatic obstructive hypertrophic cardiomyopathy. Bristol Myers also earned FDA approval for Opdualag — a treatment for melanoma — back in March and is awaiting approval for deucravacitinib in the U.S. and Europe.

Deucravacitinib is a potential therapy for plaque psoriasis. The pharma giant estimates its new product portfolio, including future approvals, will generate between $10 billion and $13 billion in revenue by 2025. And, of course, these new drugs will continue growing their sales beyond 2025. For investors focused on the long game, Bristol Myers’ shares could continue delivering solid returns just as they have all year. That’s why it’s worth taking a closer look at this pharma stock, especially at current levels.

2. Jazz Pharmaceuticals

Jazz Pharmaceuticals’ lineup of medicines features Epidiolex, a cannabidiol (CBD) derived therapy for the treatment of Lennox-Gastaut syndrome and Dravet syndrome (two rare forms of epilepsy), as well as seizures associated with tuberous sclerosis complex. In 2018, Epidiolex became the first CBD-derived drug approved by the FDA. Jazz Pharma acquired the company that originally developed Epidiolex, GW Pharmaceuticals, for $7.2 billion in cash and stock in a transaction that closed in May 2021.

Epidiolex is contributing meaningfully to Jazz Pharmaceuticals’ top line. In the first quarter, the medicine’s sales came in at $157.9 million, 6% higher than the year-ago period. Epidiolex is also being investigated as a potential treatment for epilepsy with myoclonic-atonic seizures. Jazz Pharmaceuticals believes the therapy boasts blockbuster potential.

Of course, there are other reasons to be optimistic about Jazz Pharmaceuticals. That includes the company’s portfolio of new medicines. Most notable is a trio of cancer drugs — Zepzelca, Rylaze, and Xywav — all of which first earned FDA approval in 2020 or 2021. Jazz Pharmaceuticals also has 18 novel candidates in development. The company stands likely to deliver significant regulatory wins within the next five years.

Expect Jazz Pharmaceuticals’ revenue to continue growing, too. The biotech’s top line in the first quarter increased by 34% to $813.7 million. Jazz Pharmaceuticals’ forward P/E ratio is just 8.4, making it an attractive biotech stock trading at a fair price. Purchasing shares of this stock right now would be a great move.

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