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Becton, Dickinson and Company Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

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Simply Wall St
·4 min read
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Becton, Dickinson and Company (NYSE:BDX) just released its quarterly report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 9.1% to hit US$5.3b. Becton Dickinson also reported a statutory profit of US$3.35, which was an impressive 41% above what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Becton Dickinson

earnings-and-revenue-growth
earnings-and-revenue-growth

Taking into account the latest results, the consensus forecast from Becton Dickinson's 14 analysts is for revenues of US$19.5b in 2021, which would reflect a modest 7.0% improvement in sales compared to the last 12 months. Per-share earnings are expected to leap 54% to US$8.18. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$19.3b and earnings per share (EPS) of US$9.37 in 2021. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$282, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Becton Dickinson analyst has a price target of US$300 per share, while the most pessimistic values it at US$257. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Becton Dickinson's revenue growth is expected to slow, with forecast 7.0% increase next year well below the historical 10%p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 8.9% next year. Factoring in the forecast slowdown in growth, it seems obvious that Becton Dickinson is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Becton Dickinson. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Becton Dickinson's revenues are expected to perform worse than the wider industry. The consensus price target held steady at US$282, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Becton Dickinson going out to 2023, and you can see them free on our platform here..

It is also worth noting that we have found 3 warning signs for Becton Dickinson that you need to take into consideration.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.