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Here's Why You Should Retain BD (BDX) Stock in Your Portfolio

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Becton, Dickinson and Company (BDX - Free Report) , popularly known as BD, is well poised for growth in the coming quarters, backed by its slew of product launches over the past few months. A robust third-quarter fiscal 2021 performance, along with a number of regulatory approvals, is expected to contribute further. Significant consolidation and stiff competition persist.

Over the past year, this Zacks Rank #3 (Hold) stock has gained 0.2% compared with 29.9% growth of the industry and 30.1% rise of the S&P 500.

The renowned medical technology company has a market capitalization of $70.94 billion. The company projects 8.3% growth for the next five years and expects to maintain its strong performance. BD has delivered an earnings surprise of 18.20% for the past four quarters, on average.

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Let’s delve deeper.

Strong Q3 Results: BD’s solid third-quarter fiscal 2021 results buoy our optimism. The company recorded robust segmental performances, along with solid geographical revenues, which are impressive. BD’s slew of strategic deals also augurs well. Expansion of both margins bodes well for the stock. A raised financial outlook despite pandemic-led uncertainties is encouraging.

Regulatory Approvals: We are optimistic about BD’s impressive progress on the regulatory front with respect to its products. The company, this month, announced receipt of the FDA’s Emergency Use Authorization for the BD Veritor At-Home COVID-19 Test. The test is an over-the-counter rapid antigen test that utilizes Scanwell Health mobile app to deliver reliable results in 15 minutes.

BD, in June, announced receipt of the FDA’s 510(k) clearance for its PeritX Peritoneal Catheter System. The system is to be used for the drainage of symptomatic, recurrent non-malignant ascites. In May, the company announced that the industry's first self-collection claim for human papillomavirus (“HPV”) screening has received the CE mark.

Product Launches: We are upbeat about BD’s introduction of a slew of products over the past few months. The company, this month, launched BD COR System, a new and fully automated high-throughput diagnostic system that uses robotics and sample management software algorithms. This is expected to make the BD Onclarity HPV Assay with extended genotyping for the BD COR System available to high-throughput labs that process the majority of cervical cancer screening specimens in the United States.

The same month, BD announced the launch of a new benchtop cell analyzer, BD FACSymphony A1 Cell Analyzer. The fluorescence-activated cell analyzer is expected to equip laboratories of all sizes with sophisticated flow cytometry capabilities.

Downsides

Stiff Competition: BD, which plies its trade globally, faces significant competition from a wide range of companies, which include large medical device companies with multiple product lines, some of which may have greater financial and marketing resources. Non-traditional entrants, such as technology companies, are also entering the healthcare industry, and some among these may also have greater financial and marketing resources. BD faces competition on the basis of product features and other factors across all its product lines and in each market in which its products are sold.

Significant Consolidation: The medical technology industry has also experienced a significant amount of consolidation, resulting in companies with greater scale and market presence than BD. Traditional distributors are also manufacturers of medical devices, thus becoming BD's competitors. In addition, health care systems and other providers are consolidating, resulting in greater purchasing power for these companies. As a result, competition among medical device suppliers to provide goods and services has increased.

Estimate Trend

BD is witnessing a positive estimate revision trend for 2021. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 0.7% north to $12.90.

The Zacks Consensus Estimate for the company’s fourth-quarter fiscal 2021 revenues is pegged at $4.90 billion, suggesting a 2.3% improvement from the year-ago quarter’s reported number.

Key Picks

Some better-ranked stocks from the broader medical space are Henry Schein, Inc. (HSIC - Free Report) , IDEXX Laboratories, Inc. (IDXX - Free Report) and Intuitive Surgical, Inc. (ISRG - Free Report) .

Henry Schein’s long-term earnings growth rate is estimated at 13.9%. The company presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

IDEXX’s long-term earnings growth rate is estimated at 19.9%. It currently has a Zacks Rank #2.

Intuitive Surgical’s long-term earnings growth rate is estimated at 9.7%. It currently carries a Zacks Rank #2.