Becton, Dickinson and Company (BDX Quick QuoteBDX - Free Report) , popularly known as BD, is well-poised for growth in the coming quarters, courtesy of its solid product portfolio. The optimism led by a solid second-quarter fiscal 2024 performance and a few strategic deals are expected to contribute further. However, macroeconomic concerns and stiff competition persist.

Over the past year, this Zacks Rank #3 (Hold) stock has lost 12.3% compared with the 2% decline of the industry. The S&P 500 has witnessed 26.7% growth in the said time frame.

The renowned medical technology company has a market capitalization of $66.14 billion. It projects 8.8% 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 5.4%.

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Let’s delve deeper.

Strategic Deals: BD has inked a few strategic agreements for its products over the past few months, raising our optimism. Last month, the company announced a definitive agreement to acquire Edwards Lifesciences’ Critical Care product group (Critical Care).

In February, it announced a strategic partnership with Camtech Health to advance cervical cancer screening by offering the first-ever option for women in Singapore to self-collect a sample privately in their homes.

Product Portfolio: We are upbeat about BD’s slew of product launches in recent times. Last month, the company announced the commercial launch of a new single-cell research tool — BD Rhapsody ATAC-Seq Assay — to help scientists better understand how the molecular machinery within a cell functions and how it regulates changes in a cell that can lead to cancer and other diseases.

In May, BD received the FDA’s approval for the use of self-collected vaginal specimens for human papillomavirus testing when cervical specimens cannot otherwise be obtained.

Strong Q2 Results: BD’s solid second-quarter fiscal 2024 results buoy our optimism. The company registered solid top-line results, along with improvements in organic revenues and bottom-line performances. Robust performances by all 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.

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.

Stiff Competition: BD operates in an increasingly complex and challenging medical technology marketplace. Although technological advances and scientific discoveries have accelerated the pace of change in medical technology, the regulatory environment of medical products is becoming more complex and vigorous. Acquisitions and collaborations by and among companies seeking a competitive advantage also affect the competitive environment.

Estimate Trend

BD is witnessing a positive estimate revision trend for fiscal 2024. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 0.8% north to $13.04.

The Zacks Consensus Estimate for the company’s third-quarter fiscal 2024 revenues is pegged at $5.07 billion, indicating a 3.9% improvement from the year-ago quarter’s reported number.

Key Picks

Some better-ranked stocks in the broader medical space are DaVita Inc. (DVA Quick QuoteDVA - Free Report) , Stryker Corporation (SYK Quick QuoteSYK - Free Report) and Ecolab Inc. (ECL Quick QuoteECL - Free Report) .

DaVita, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 13.6%. DVA’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 29.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

DaVita’s shares have gained 34.2% compared with the industry’s 12.7% rise in the past year.

Stryker, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 10.6%. SYK’s earnings surpassed estimates in each of the trailing four quarters, with the average being 4.9%.

Stryker has gained 12.2% against the industry’s 2.4% decline in the past year.

Ecolab, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 14.3%. ECL’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 1.3%.

Ecolab’s shares have rallied 29% against the industry’s 12.8% decline in the past year.