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Becton, Dickinson Hits a 52-Week High: What's Driving It?

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Shares of Becton, Dickinson and Company (BDX - Free Report) rallied to a new 52-week high of $231.38 on Jan 17, closing a tad lower at $231.37. This indicates a strong year-to-date return of approximately 5.8%, better than the S&P 500 index’s 1.8%.

Based in Franklin Lakes, NJ, Becton, Dickinson, commonly known as BD, is a medical technology company engaged principally in the development, manufacture and sale of medical devices, instrument systems and reagents.

In the last year, BD outperformed the industry in terms of share price. The stock has returned 33%, comparing favorably with the industry’s gain of just 25.3%. In fact, the current return is relatively higher than the S&P 500 index’s rally of 8.9%. Notably, BD has a market cap of $49.87 billion.

Considering the stable performance of the, we expect BD to scale higher in the coming quarters. The company’s long-term growth of 12.3% looks promising.

Becton, Dickinson and Company Price

 

 

Let’s take a look at three major factors that have been boosting BD lately.

Favorable Tiding on Regulatory Front

BD, in collaboration with Check-Points Health B.V., recently obtained CE Mark for molecular screening test for antibiotic-resistant carbapenemase-producing organisms (CPOs) on the BD MAX System. This development is expected to strengthen the company’s foothold in molecular diagnostic business, globally.

The abundant prospects of global molecular diagnostics market are encouraging. According to a research by MarketsandMarkets, this market is projected to reach $10.12 billion by 2021 from $6.54 billion in 2016, at a CAGR of 9.1% (read more: BD's CE Mark and Check-Point's Screening Test to Fight CPO).

Acquisition of C.R. Bard

Strategic acquisitions have been a key growth catalyst for BD. Recently, BD acquired C.R. Bard. Per management, the company is well placed to become one of the biggest medical technology devices company in the world with approximately $16 billion in annualized revenues. The cash-plus-stock acquisition is valued at $24 billion.

After the completion of the deal, BD will create a third business segment — BD Interventional. Notably, C.R. Bard will be integrated into this vertical. Coming to the strategic advantages post the deal closure, BD will generate high-single digit growth in adjusted earnings per share by fiscal 2019.

The transaction will also lead to $300 million in pre-tax annual savings in fiscal 2020. BD will be able to expand to new areas where C.R. Bard operated in — fast-growing vascular access segments — PICCs (peripherally inserted central catheters), midlines and drug delivery ports.

Estimate Revision Trend

Meanwhile, the company’s recent earnings estimates have been favorable. The current year has seen four estimates go higher in the past 60 days, compared with two movements in the opposite direction. This has had a significant impact on the Zacks Consensus Estimate for earnings, which inched up 1.6% to $10.88.

Becton, Dickinson and Company Price and Consensus

 

 

Zacks Rank & Key Picks

BD has a Zacks Rank #3 (Hold).

A few better-ranked stocks in the broader medical sector are Integer Holdings Corporation (ITGR - Free Report) , Bio-Rad Laboratories, Inc. (BIO - Free Report) and Intuitive Surgical, Inc. (ISRG - Free Report) .

Bio-Rad Laboratories flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The company has a long-term expected earnings growth rate of 25%.

Integer Holdings has a long-term expected earnings growth rate of 15%. The stock carries a Zacks Rank #2 (Buy).

Intuitive Surgical has a long-term expected earnings growth rate of 9.2%. The stock carries a Zacks Rank #2.

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