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Three Reasons to Add BD (BDX) Stock to Your Portfolio 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, courtesy of a few product launches over the past few months. The optimism led by a solid first-quarter fiscal 2023 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 #2 (Buy) stock has lost 10.8% compared with 6.3% decline of the industry and 8.4% fall of the S&P 500.

The renowned medical technology company has a market capitalization of $67.06 billion. It projects 7.8% growth for the next five years and expects to maintain its strong performance. BD has delivered an earnings surprise of 6.5% for the past four quarters, on average.

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Let’s delve deeper.

Regulatory Approvals: BD has been progressing impressively on the regulatory front, raising our optimism. Last month, the company received the FDA’s approval for the BD Onclarity HPV (human papillomavirus) Assay to be used with the ThinPrep Pap Test.

The same month, BD received the FDA’s EUA for a new molecular diagnostic combination test for SARS-CoV-2, Influenza A + B and Respiratory Syncytial Virus — BD Respiratory Viral Panel assay for BD MAX System.

Product Launches: We are upbeat about BD’s slew of product launches in recent times. Last month, the company announced a new instrument for single-cell multiomics analysis — BD Rhapsody HT Xpress System — that will enable scientists to run high-throughput studies without compromising sample integrity.

During the first-quarter fiscal 2023 earnings call the same month, BD stated that it had launched PosiFlush SafeScrub, a product in its Medical segment.

Strong Q1 Results: BD’s solid first-quarter fiscal 2023 results buoy our optimism. An improvement in the overall base revenues and robust performances by the majority of its segments and in the United States were registered. Strength in BD’s segment’s business units during the reported quarter was also witnessed. BD’s recent agreement with Biocorp and a co-exclusive commercial agreement with Magnolia Medical Technologies, Inc. raises optimism.

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 positive estimate revision trend for fiscal 2023. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 1.7% north to $12.14.

The Zacks Consensus Estimate for the company’s second-quarter fiscal 2023 revenues is pegged at $4.66 billion, suggesting a 7% fall from the year-ago quarter’s reported number.

This compares to our fiscal second-quarter revenue estimate of $4.64 billion.

Other Key Picks

A few other top-ranked stocks in the broader medical space are Hologic, Inc. (HOLX - Free Report) , McKesson Corporation (MCK - Free Report) and Avanos Medical, Inc. (AVNS - Free Report) .

Hologic, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 15.2%. HOLX’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 30.6%.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Hologic has gained 11.2% against the industry’s 13% decline in the past year.

McKesson, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 10.4%. MCK’s earnings surpassed estimates in two of the trailing four quarters and missed the same in the other two, the average beat being 3.4%.

McKesson has gained 21.9% against the industry’s 6.3% decline over the past year.

Avanos, carrying a Zacks Rank #2 at present, has an estimated growth rate of 1.8% for 2023. AVNS’ earnings surpassed estimates in all the trailing four quarters, the average beat being 11%.

Avanos has lost 15.1% compared with the industry’s 13% decline over the past year.

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