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Here's Why You Should Hold on to BD (BDX) Stock for Now
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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 a few strategic deals over the past few months. A robust third-quarter fiscal 2022 performance, along with a few regulatory approvals, is expected to contribute further. Forex woes and significant consolidation persist.
Over the past year, this Zacks Rank #3 (Hold) stock has lost 1.9% compared with 14.8% fall of the industry and 14.4% decline of the S&P 500.
The renowned medical technology company has a market capitalization of $72.11 billion. It projects 6.8% growth for the next five years and expects to maintain its strong performance. BD has delivered an earnings surprise of 11.9% for the past four quarters, on average.
Image Source: Zacks Investment Research
Let’s delve deeper.
Regulatory Approvals: BD has been progressing impressively on the regulatory front, raising our optimism. During the fiscal 2022 third-quarter earnings release in August, BD confirmed the receipt of the CE mark for COVID-19 and Influenza A/B combination test for BD COR MX.
During the earnings call, the company confirmed receiving the FDA’s 510(k) clearance and launching the Aspirex mechanical aspiration thrombectomy system within the BD Interventional segment in the United States.
Strategic Deals: We are upbeat about BD’s slew of strategic deals over the past few months. In August, the company announced a worldwide commercial collaboration agreement with Accelerate Diagnostics, Inc. The same month, BD entered into a collaboration with Laboratory Corporation of America Holdings or LabCorp.
In July, BD acquired MedKeeper, which complements BD's existing presence in the pharmacy.
Strong Q3 Results: BD’s solid third-quarter fiscal 2022 results buoy our optimism. Improvement in the overall top line and base revenues was impressive. The year-over-year uptick in adjusted earnings per share was also encouraging. Robust performances by the majority of the segments and in the United States were impressive. The expansion of both margins was a plus. A raised financial outlook for the full fiscal year is also promising.
Downsides
Significant Consolidation: The medical technology industry has been experiencing a significant amount of consolidation, resulting in companies with greater scale and market presence than BD. As a result, competition among medical device suppliers to provide goods and services has increased. Further consolidation in the industry could intensify competition among medical device suppliers and exert additional pressure on the demand for and prices of BD’s products.
Forex Woes: BD generates a substantial amount of its revenues from international operations. The revenues BD report with respect to its operations outside the United States may be adversely affected by fluctuations in foreign currency exchange rates. BD cannot predict with any certainty changes in foreign currency exchange rates or the degree to which it can mitigate such risks.
Estimate Trend
BD is witnessing a negative estimate revision trend for fiscal 2022. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 4.7% south to $11.30.
The Zacks Consensus Estimate for the company’s fourth-quarter fiscal 2022 revenues is pegged at $4.70 billion, suggesting an 8.5% fall from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , ShockWave Medical, Inc. (SWAV - Free Report) and McKesson Corporation (MCK - Free Report) .
AMN Healthcare, flaunting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 3.2%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 15.7%.
AMN Healthcare has lost 10.6% compared with the industry’s 38.5% fall in the past year.
ShockWave Medical, sporting a Zacks Rank #1 at present, has an estimated growth rate of 33.1% for 2023. SWAV’s earnings surpassed estimates in all the trailing four quarters, the average beat being 180.1%.
ShockWave Medical has gained 24% against the industry’s 33.9% fall over the past year.
McKesson, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 9.9%. MCK’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, the average beat being 13%.
McKesson has gained 77.1% against the industry’s 14.8% fall over the past year.
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Here's Why You Should Hold on to BD (BDX) Stock for Now
Becton, Dickinson and Company (BDX - Free Report) , popularly known as BD, is well-poised for growth in the coming quarters, backed by a few strategic deals over the past few months. A robust third-quarter fiscal 2022 performance, along with a few regulatory approvals, is expected to contribute further. Forex woes and significant consolidation persist.
Over the past year, this Zacks Rank #3 (Hold) stock has lost 1.9% compared with 14.8% fall of the industry and 14.4% decline of the S&P 500.
The renowned medical technology company has a market capitalization of $72.11 billion. It projects 6.8% growth for the next five years and expects to maintain its strong performance. BD has delivered an earnings surprise of 11.9% for the past four quarters, on average.
Image Source: Zacks Investment Research
Let’s delve deeper.
Regulatory Approvals: BD has been progressing impressively on the regulatory front, raising our optimism. During the fiscal 2022 third-quarter earnings release in August, BD confirmed the receipt of the CE mark for COVID-19 and Influenza A/B combination test for BD COR MX.
During the earnings call, the company confirmed receiving the FDA’s 510(k) clearance and launching the Aspirex mechanical aspiration thrombectomy system within the BD Interventional segment in the United States.
Strategic Deals: We are upbeat about BD’s slew of strategic deals over the past few months. In August, the company announced a worldwide commercial collaboration agreement with Accelerate Diagnostics, Inc. The same month, BD entered into a collaboration with Laboratory Corporation of America Holdings or LabCorp.
In July, BD acquired MedKeeper, which complements BD's existing presence in the pharmacy.
Strong Q3 Results: BD’s solid third-quarter fiscal 2022 results buoy our optimism. Improvement in the overall top line and base revenues was impressive. The year-over-year uptick in adjusted earnings per share was also encouraging. Robust performances by the majority of the segments and in the United States were impressive. The expansion of both margins was a plus. A raised financial outlook for the full fiscal year is also promising.
Downsides
Significant Consolidation: The medical technology industry has been experiencing a significant amount of consolidation, resulting in companies with greater scale and market presence than BD. As a result, competition among medical device suppliers to provide goods and services has increased. Further consolidation in the industry could intensify competition among medical device suppliers and exert additional pressure on the demand for and prices of BD’s products.
Forex Woes: BD generates a substantial amount of its revenues from international operations. The revenues BD report with respect to its operations outside the United States may be adversely affected by fluctuations in foreign currency exchange rates. BD cannot predict with any certainty changes in foreign currency exchange rates or the degree to which it can mitigate such risks.
Estimate Trend
BD is witnessing a negative estimate revision trend for fiscal 2022. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 4.7% south to $11.30.
The Zacks Consensus Estimate for the company’s fourth-quarter fiscal 2022 revenues is pegged at $4.70 billion, suggesting an 8.5% fall from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. (AMN - Free Report) , ShockWave Medical, Inc. (SWAV - Free Report) and McKesson Corporation (MCK - Free Report) .
AMN Healthcare, flaunting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 3.2%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 15.7%.
You can see the complete list of today’s Zacks #1 Rank stocks here.
AMN Healthcare has lost 10.6% compared with the industry’s 38.5% fall in the past year.
ShockWave Medical, sporting a Zacks Rank #1 at present, has an estimated growth rate of 33.1% for 2023. SWAV’s earnings surpassed estimates in all the trailing four quarters, the average beat being 180.1%.
ShockWave Medical has gained 24% against the industry’s 33.9% fall over the past year.
McKesson, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 9.9%. MCK’s earnings surpassed estimates in three of the trailing four quarters and missed the same in one, the average beat being 13%.
McKesson has gained 77.1% against the industry’s 14.8% fall over the past year.