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Becton, Dickinson and Company Message Board

  • dewman60634 dewman60634 Mar 2, 2009 9:05 AM Flag

    BDX Upgraded by Credit Suisse

    Becton Dickinson & Co. (BDX) Outperform K. Stewart
    CP: US$ 61.89 TP: US$ 78 CAP: US$ 15.4b
    UPGRADING to OUTPERFORM (from Neutral), Back to Basics
    • We are upgrading BDX shares to Outperform from Neutral. As US healthcare reform looms on the horizon, we believe BDX
    shares stands out as a name to own in healthcare. The positive BDX case include:
    • BD is among the most geographically diverse. The US is just 44% of sales making it less exposed than some others to US
    healthcare reform.
    • BD's business mix is primarily basic medical products (syringes, needles), diagnostics (preanalytical and instruments), and
    Lifesciences tools which have lower reform/reimbursement risk than many other areas in MedTech. BD Bioscience could
    modestly benefit from the economic stimulus package which boosts research spending. While BD is not immune to the
    broader macro issues and slowing of healthcare utilization, we think it is better positioned than others.
    • As oil and resin costs remains low, this is a positive for BD as resin accounts for 7% of COGS as it provides greater comfort in
    the company's ability to make its earnings numbers.
    • BD has a strong balance sheet and cash flows. We expect BDX to generate nearly $1.9B in cash from operations and $1.2B
    in free cash flows. BD's dividend yield is 2.1%.
    • Despite these positives, BDX shares have traded down in sympathy and largely in line with the rest of the healthcare over the
    past week. We believe investors should revisit the positive investment case in BDX.
    • We are maintaining our $78 price target, which incorporates a PE of 14.1x our calendar 2010 EPS estimate of $5.52. BDX
    shares currently trade at 12.5x our calendar 2009 EPS estimate. During the 1990-1995 period which included an economic
    recession and healthcare reform, BDX shares traded at an average of 13.0x NTM EPS. We believe the company is better
    positioned today and as such, we believe a premium PE is warranted.
    Becton Dickinson & Co. (BDX) Outperform K. Stewart
    CP: US$ 61.89 TP: US$ 78 CAP: US$ 15.4b
    UPGRADING to OUTPERFORM (from Neutral), Back to Basics
    • We are upgrading BDX shares to Outperform from Neutral. As US healthcare reform looms on the horizon, we believe BDX
    shares stands out as a name to own in healthcare. The positive BDX case include:
    • BD is among the most geographically diverse. The US is just 44% of sales making it less exposed than some others to US
    healthcare reform.
    • BD's business mix is primarily basic medical products (syringes, needles), diagnostics (preanalytical and instruments), and
    Lifesciences tools which have lower reform/reimbursement risk than many other areas in MedTech. BD Bioscience could
    modestly benefit from the economic stimulus package which boosts research spending. While BD is not immune to the
    broader macro issues and slowing of healthcare utilization, we think it is better positioned than others.
    • As oil and resin costs remains low, this is a positive for BD as resin accounts for 7% of COGS as it provides greater comfort in
    the company's ability to make its earnings numbers.
    • BD has a strong balance sheet and cash flows. We expect BDX to generate nearly $1.9B in cash from operations and $1.2B
    in free cash flows. BD's dividend yield is 2.1%.
    • Despite these positives, BDX shares have traded down in sympathy and largely in line with the rest of the healthcare over the
    past week. We believe investors should revisit the positive investment case in BDX.
    • We are maintaining our $78 price target, which incorporates a PE of 14.1x our calendar 2010 EPS estimate of $5.52. BDX
    shares currently trade at 12.5x our calendar 2009 EPS estimate. During the 1990-1995 period which included an economic
    recession and healthcare reform, BDX shares traded at an average of 13.0x NTM EPS. We believe the company is better
    positioned today and as such, we believe a premium PE is warranted.

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BDX
113.16+0.23(+0.20%)Apr 17 4:01 PMEDT

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