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Becton, Dickinson Hits at a 52-Week High: What's Driving It?

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On Aug 20, shares of Becton, Dickinson and Company (BDX - Free Report) , also known as BD, reached a 52-week high of $254.35, closing the session marginally lower at $252.81. The stock rallied to the high following impressive third-quarter fiscal 2018 results released earlier this month.

Over the past year, shares of BD have rallied 27%, outperforming the industry’s growth of 15.5%. The current level is also higher than the S&P 500 index’s gain of 17.9%.

The New Jersey-based medical technology company is expected to scale new highs. The company has an average positive earnings surprise of 2% for the trailing four quarters.

The estimate revision trend for the current year is impressive as well. Over the past 60 days, the Zacks Consensus Estimate for earnings per share inched up 0.2% to $11.01.

The stock carries a Zacks Rank #3 (Hold).

Factors Driving BD

Surging Segmental Revenues: In the recently reported fiscal third quarter, BD Medical posted worldwide revenues of $2.25 billion, up 20% from the year-ago quarter and 5.7% at constant currency (cc). The results were driven by strength in Medication Delivery Solutions, Medication Management Solutions and Pharmaceutical systems.

BD Life Sciences raked in worldwide revenues of $1.08 billion, up 8.2% year over year and 5.6% at cc. Per management, revenues were strong across the Preanalytical Systems, Diagnostic Systems and Biosciences units.

Lastly, BD Interventional unit saw worldwide revenues of $0.95 billion up 5.1% year over year at cc.

Strategic Acquisitions: Earlier this year, BD completed the acquisition of C.R. Bard, which proved accretive in the recently reported quarter. Per management, the integration of Bard drove BD Medical’s sales as well as U.S. sales, which grew 5.9% at cc. Management expects the C.R. Bard buyout to contribute to adjusted earnings per share on a high single-digit basis in fiscal 2019.

Last month, BD completed the takeover of Texas-based TVA Medical, which is likely to boost BD Medical unit. It will allow BD to provide minimally-invasive procedures for patients with chronic kidney diseases. (Read More: BD Buys TVA Medical, To Provide Minimally Invasive Procedure)

View Impressive: Buoyed by a solid fiscal third-quarter show, BD expects fiscal 2018 sales to improve 31.5% on a reported basis compared to the previous 31-31.5%. At cc, revenues are estimated to grow 5.5%, compared to the prior range of 5-5.5%. The Zacks Consensus Estimate is pegged at $16 billion.

Earnings are expected within $10.95-$11.05 compared with the previous $10.90-$11.05. This represents growth of approximately 15.5-16.5% over fiscal 2017 and of 12% at cc. The Zacks Consensus Estimate is pinned at $11.01, within the guided range.

Key Picks

A few better-ranked stocks in the broader medical space are Intuitive Surgical (ISRG - Free Report) , Integer Holdings Corporation (ITGR - Free Report) and Masimo Corporation (MASI - Free Report) .

Intuitive Surgical’s expected long-term earnings growth rate is 14.7%. The stock carries a Zacks Rank #2 (Buy).

Integer Holdings has an expected long-term earnings growth rate of 15%. The stock flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Masimo’s long-term earnings growth rate is projected at 14.8%. The stock carries a Zacks Rank #2.

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