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Three Reasons to 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, courtesy of its series of product launches over the past few months. The optimism led by a solid first-quarter fiscal 2024 performance and a few regulatory approvals are expected to contribute further. However, macroeconomic concerns and forex volatility persist.
Over the past year, this Zacks Rank #3 (Hold) stock has lost 7.2% against the 7.3% rise of the industry and 19.2% growth of the S&P 500.
The renowned medical technology company has a market capitalization of $67.91 billion. It projects 9.7% growth for the next five years and expects to maintain its strong performance. BD’s earnings surpassed estimates in three of the trailing four quarters and broke even once, with the average surprise being 4.6%.
Image Source: Zacks Investment Research
Let’s delve deeper.
Strong Q1 Results: BD’s solid first-quarter fiscal 2024 results buoy our optimism. The company registered solid top-line results, along with improvements in organic revenues. Robust performances by its Medical and Interventional segments and both geographic regions were also recorded. Strength in most of BD’s segment’s business units during the reported quarter was also seen.
Regulatory Approvals: BD has received a few regulatory approvals for its products over the past few months, raising our optimism. On the first quarter of fiscal 2024 earnings call in February, management confirmed that it anticipates its first 510(k) submission for the BD Elience system and its first assay in fiscal 2024.
In December 2023, BD announced its receipt of the FDA’s 510(k) clearance for the BD MiniDraw Capillary Blood Collection System.
Product Launches: We are upbeat about BD’s slew of product launches in recent times. On the first quarter of fiscal 2024 earnings call, BD’s management confirmed that its PureWick program is progressing well. The company also remains on track to launch its next-generation Female External Catheter later in fiscal 2024.
On the same call, management confirmed that the new BD MiniDraw Capillary Blood Collection System and the NextGen PureWick are on track to launch later in fiscal 2024.
Downsides
Macroeconomic Concerns: Global economic challenges, including rising inflation and volatile capital markets, among others, pose risks to the demand and pricing of BD’s products and services. These conditions can disrupt its supply chain, impact production, and increase its borrowing costs, affecting its business.
Forex Volatility: BD generates a substantial amount of its revenues from international operations. The revenues BD reports with respect to its operations outside the United States may be affected by fluctuations in foreign currency exchange rates. Any exchange rate hedging activities in which BD engages may only offset a portion of the adverse financial impact resulting from unfavorable changes in foreign currency exchange rates.
Estimate Trend
BD is witnessing a negative estimate revision trend for fiscal 2024. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 4.3% south to $12.91.
The Zacks Consensus Estimate for the company’s second-quarter fiscal 2024 revenues is pegged at $5.01 billion, suggesting a 3.8% improvement from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , Merit Medical Systems, Inc. (MMSI - Free Report) and Integer Holdings Corporation (ITGR - Free Report) .
DaVita, carrying a Zacks Rank #2 (Buy), has an estimated long-term growth rate of 17.3%. DVA’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 36.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DaVita’s shares have gained 30.7% compared with the industry’s 5.4% rise in the past year.
Merit Medical, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 11.5%. MMSI’s earnings surpassed estimates in each of the trailing four quarters, with the average being 14.4%.
Merit Medical has gained 9.4% compared with the industry’s 7.3% rise in the past year.
Integer Holdings, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 15%. ITGR’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 11.9%.
Integer Holdings’ shares have rallied 40% compared with the industry’s 0.9% rise in the past year.
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Three Reasons to Retain BD (BDX) Stock in Your Portfolio
Becton, Dickinson and Company (BDX - Free Report) , popularly known as BD, is well-poised for growth in the coming quarters, courtesy of its series of product launches over the past few months. The optimism led by a solid first-quarter fiscal 2024 performance and a few regulatory approvals are expected to contribute further. However, macroeconomic concerns and forex volatility persist.
Over the past year, this Zacks Rank #3 (Hold) stock has lost 7.2% against the 7.3% rise of the industry and 19.2% growth of the S&P 500.
The renowned medical technology company has a market capitalization of $67.91 billion. It projects 9.7% growth for the next five years and expects to maintain its strong performance. BD’s earnings surpassed estimates in three of the trailing four quarters and broke even once, with the average surprise being 4.6%.
Image Source: Zacks Investment Research
Let’s delve deeper.
Strong Q1 Results: BD’s solid first-quarter fiscal 2024 results buoy our optimism. The company registered solid top-line results, along with improvements in organic revenues. Robust performances by its Medical and Interventional segments and both geographic regions were also recorded. Strength in most of BD’s segment’s business units during the reported quarter was also seen.
Regulatory Approvals: BD has received a few regulatory approvals for its products over the past few months, raising our optimism. On the first quarter of fiscal 2024 earnings call in February, management confirmed that it anticipates its first 510(k) submission for the BD Elience system and its first assay in fiscal 2024.
In December 2023, BD announced its receipt of the FDA’s 510(k) clearance for the BD MiniDraw Capillary Blood Collection System.
Product Launches: We are upbeat about BD’s slew of product launches in recent times. On the first quarter of fiscal 2024 earnings call, BD’s management confirmed that its PureWick program is progressing well. The company also remains on track to launch its next-generation Female External Catheter later in fiscal 2024.
On the same call, management confirmed that the new BD MiniDraw Capillary Blood Collection System and the NextGen PureWick are on track to launch later in fiscal 2024.
Downsides
Macroeconomic Concerns: Global economic challenges, including rising inflation and volatile capital markets, among others, pose risks to the demand and pricing of BD’s products and services. These conditions can disrupt its supply chain, impact production, and increase its borrowing costs, affecting its business.
Forex Volatility: BD generates a substantial amount of its revenues from international operations. The revenues BD reports with respect to its operations outside the United States may be affected by fluctuations in foreign currency exchange rates. Any exchange rate hedging activities in which BD engages may only offset a portion of the adverse financial impact resulting from unfavorable changes in foreign currency exchange rates.
Estimate Trend
BD is witnessing a negative estimate revision trend for fiscal 2024. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 4.3% south to $12.91.
The Zacks Consensus Estimate for the company’s second-quarter fiscal 2024 revenues is pegged at $5.01 billion, suggesting a 3.8% improvement from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , Merit Medical Systems, Inc. (MMSI - Free Report) and Integer Holdings Corporation (ITGR - Free Report) .
DaVita, carrying a Zacks Rank #2 (Buy), has an estimated long-term growth rate of 17.3%. DVA’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 36.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DaVita’s shares have gained 30.7% compared with the industry’s 5.4% rise in the past year.
Merit Medical, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 11.5%. MMSI’s earnings surpassed estimates in each of the trailing four quarters, with the average being 14.4%.
Merit Medical has gained 9.4% compared with the industry’s 7.3% rise in the past year.
Integer Holdings, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 15%. ITGR’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 11.9%.
Integer Holdings’ shares have rallied 40% compared with the industry’s 0.9% rise in the past year.