CWCO vs. GWRS: Which Stock Should Value Investors Buy Now?
Becton, Dickinson and Company BDX has topped estimates in the trailing four quarters. The company currently has a market capitalization of approximately $62.73 billion. Currently, the company faces product recall issues and foreign exchange headwinds.
The Zacks Rank #3 (Hold) stock has rallied 22.8%, outperforming the industry’s growth of 7.1% in a year’s time.
Here we take a quick look at the major factors that have been plaguing Becton, Dickinson and discuss the factors that ensure near-term recovery.
Product Recall Issue
Becton Dickinson, also known as BD, recently recalled some of its products. Notably, BD Vacutainer EDTA Lavender and BD Vacutainer Lithium Heparin Green Top Tube were withdrawn. The devices are used to collect blood samples from a vein. The products were suspected to pose serious health hazards to patients and laboratory personnel.
Moreover, within Diabetes Care business, BD has temporarily paused shipment of its insulin infusion sets. This was due to a moderately higher-than-anticipated rate of complaints associated with insertion that occurred during the pilot launch of the product.
Foreign Exchange Headwinds
BD has a strong international presence. The company generates a high share of revenues from international operations which get affected by fluctuations in foreign currency exchange rates. The strengthening U.S. dollar mars BD’s prospects in this regard.
Dented by such headwinds, the Zacks Consensus Estimate for BD’s current-quarter earnings per share fell 1% to $2.84 in the last 60 days.
Becton, Dickinson and Company Price and Consensus
Becton, Dickinson and Company Price and Consensus | Becton, Dickinson and Company Quote
What’s Favoring the Stock?
BD raised its fiscal 2018 guidance. The company expects adjusted earnings per share within $10.9-$11.05. This represents growth of approximately 15-16.5% over fiscal 2017. The Zacks Consensus Estimate is pegged at $10.99, which lies within the guided range.
The company raised the revenue growth guidance for fiscal 2018 to 5-5.5%, which is also at the high end of the previous guidance.
BD’s solid product portfolio and strong international presence have helped the company garner strong revenues and earnings over the years.
Notably, since 2019, the company’s revenues have seen a CAGR of 7.1% to $12.9 million.
Moreover, earnings saw a CAGR of 8.4% to $9.49 per share.
Such upbeat performance continues to provide cushion to the company’s stock.
Unhindered by persistent issues, analysts are optimistic about BD.
For current-quarter revenues, the Zacks Consensus Estimate is pegged at $4.24 billion, reflecting a year-over-year rise of 39.8%.
A few better-ranked stocks in the broader medical space are Genomic Health GHDX, Abiomed ABMD and Stryker Corporation SYK.
Genomic Health has an expected earnings growth rate of 187.5% for the current quarter. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Abiomed has a projected long-term earnings growth rate of 27%. The stock sports a Zacks Rank #1.
Stryker has a projected long-term earnings growth rate of 9.7%. The stock carries a Zacks Rank #2 (Buy).
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