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Here's Why You Should Retain BD (BDX) Stock in Your Portfolio

·4 min read

Becton, Dickinson and Company BDX, popularly known as BD, is well poised for growth in the coming quarters, backed by its slew of strategic deals over the past few months. A robust first-quarter fiscal 2022 performance, along with a few regulatory approvals, is expected to contribute further. Forex woes and a stiff competitive landscape persist.

Over the past year, this Zacks Rank #3 (Hold) stock has gained 7.1% compared with 5.8% growth of the industry and 9.7% rise of the S&P 500.

The renowned medical technology company has a market capitalization of $75.23 billion. The company projects 6.5% growth for the next five years and expects to maintain its strong performance. BD has delivered an earnings surprise of 12.5% for the past four quarters, on average.

Zacks Investment Research
Zacks Investment Research


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Let’s delve deeper.

Regulatory Approvals: We are optimistic about BD’s impressive progress on the regulatory front with respect to its products. The company, in January, received the 510(k) clearance from the FDA for the BD Kiestra IdentifA system. The system has been developed to automate the preparation of microbiology bacterial identification testing.

In December 2021, BD’s latest BD COR MX received the CE Mark for infectious disease testing. The company received 510(k) clearance for expanded indications from the FDA for the Rotarex Atherectomy System in October 2021.

Strategic Deals: We are upbeat about BD’s slew of strategic deals over the past few months. The company has collaborated with ReturnSafe (the all-in-one software solution for COVID-19-related employee health, safety and compliance) in February to integrate the BD Veritor At-Home COVID-19 Test directly within the ReturnSafe testing management platform. The same month, BD completed the acquisition of Cytognos, a Salamanca, Spain-based privately held company.

In December 2021, BD completed the acquisitions of Scanwell Health Inc., Tissuemed, Ltd. and Venclose, Inc.

Strong Q1 Results: BD’s solid first-quarter fiscal 2022 results buoy our optimism. Improvement in base revenues and robust performances by the majority of its segments are impressive. A raised financial outlook for the full fiscal year is also promising.

Downsides

Stiff Competition: BD faces significant competition from a wide range of companies. These include large medical device companies with multiple product lines, some of which may have greater financial and marketing resources, as well as firms that are more specialized than BD is with respect to particular markets or product lines. The company faces competition across all of its product lines and in markets where its products are sold.

Foreign Exchange: BD generates a substantial amount of its revenues from international operations and also anticipates that a significant portion of its sales will continue to come from outside the United States in future. The revenues BD reports with respect to its operations outside the United States may be adversely affected by fluctuations in foreign currency exchange rates. BD cannot predict with any certainty changes in foreign currency exchange rates or the degree to which it can mitigate these risks.

Estimate Trend

BD is witnessing a positive estimate revision trend for 2022. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 3.1% north to $12.80.

The Zacks Consensus Estimate for the company’s second-quarter fiscal 2022 revenues is pegged at $4.86 billion, suggesting a 1% fall from the year-ago quarter’s reported number.

Key Picks

A few stocks from the broader medical space that investors can consider are AMN Healthcare Services, Inc. AMN, Allscripts Healthcare Solutions, Inc. MDRX and Henry Schein, Inc. HSIC.

AMN Healthcare has an estimated long-term growth rate of 16.2%. AMN’s earnings surpassed estimates in the trailing four quarters, the average surprise being 20%. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AMN Healthcare has gained 32.9% against the industry’s 59.4% fall over the past year.

Allscripts, carrying a Zacks Rank #2 (Buy), has an estimated long-term growth rate of 11.1%. MDRX’s earnings surpassed estimates in the trailing four quarters, the average surprise being 34.1%.

Allscripts has gained 23.9% against the industry’s 54.9% fall over the past year.

Henry Schein has an estimated long-term growth rate of 11.8%. HSIC’s earnings surpassed estimates in the trailing four quarters, the average surprise being 25.5%. It currently flaunts a Zacks Rank #1.

Henry Schein has gained 28.3% compared with the industry’s 5.8% rise over the past year.


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Becton, Dickinson and Company (BDX) : Free Stock Analysis Report

Allscripts Healthcare Solutions, Inc. (MDRX) : Free Stock Analysis Report

Henry Schein, Inc. (HSIC) : Free Stock Analysis Report

AMN Healthcare Services Inc (AMN) : Free Stock Analysis Report

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Zacks Investment Research