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A Look At How Becton Dickinson Shares Perform After Earnings

Shanthi Rexaline

Medical supplier Becton Dickinson and Co (NYSE: BDX) is scheduled to release fiscal fourth-quarter results Tuesday ahead of the market open.

The Thesis

Becton is likely to wrap the year on a strong note on both the top- and bottom-line, according to JPMorgan Securities analysts.

The research firm sees medical management, urology and surgery as businesses that will remain strong heading into the coming year.

JPMorgan forecast sales of $4.6 billion, $29 million ahead of the consensus. The analyst expects top-line growth to be predominantly driven by the interventional business.

Gross margin is expected to come in slightly lower than the expected 57.3%, and this figure is likely to be offset by a lower tax rate and a stronger top-line, the analyst said.

JPMorgan forecast earnings per share of $3.30.

2020 Guidance: What To Expect

On the earnings call, the focus is likely to be on fiscal year 2020 guidance, according to JPMorgan. 

The research firm expects the company to guide to 5-6% organic sales and EPS of $12.85-$13.05 for the year.

The firm sees top-line upside coming from a ramp in Bard synergies and strength across the various businesses, particularly with Pumps, Pyxis and new software introductions driving the Medication Management System; easier comps; and growth of core business in Europe for Diagnostics and new product launches in Peripheral Intervention.

Looking at the historical trend since 2008, the firm noted that Becton reported top-line beats 61% of the time and bottom-line beats 85% of the time. The company's average EPS beat is about 6 cents, according to JPMorgan. 

Notwithstanding this, Becton stock reacted negatively 61% of the time, with an average decline of 0.5%, the research firm said. 

Price Action

Becton shares were trading higher by 1.16% at $261.14 at the time of publication. 

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Latest Ratings for BDX

Date Firm Action From To
Sep 2019 Maintains Outperform
Jul 2019 Maintains Equal-Weight
Jun 2019 Maintains Strong Buy

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