Becton, Dickinson Faces Market Challenges Despite Strong Earnings
With a market cap of $64.3 billion, Becton, Dickinson and Company (BDX) stands as a major player in the global medical technology landscape, offering medical devices, laboratory equipment, and diagnostic products. Headquartered in Franklin Lakes, New Jersey, the company operates through three main segments: BD Medical, BD Life Sciences, and BD Interventional, catering to healthcare providers and researchers around the globe.
Stock Performance: A Closer Look
Over the last year, BDX stock has struggled compared to the broader market. It has seen a 4.8% decline while the S&P 500 Index ($SPX) has increased by 30.1%. Year-to-date in 2024, BDX has dropped 8.8%, in contrast to the SPX’s gain of 24.1%.
Lagging Behind the Sector
Further analysis shows that BDX has also underperformed against the Health Care Select Sector SPDR Fund’s (XLV) 10.7% rise over the same period, which includes a 4.8% increase year-to-date.
Earnings Results and Market Reaction
In its recent earnings report, BDX delivered a better-than-expected Q4 adjusted EPS of $3.81 and revenue of $5.4 billion. Despite this positive news, shares fell by 5.4% on November 7, primarily due to disappointing results in the Life Sciences segment, which failed to meet sales forecasts. Concerns about growth in diagnostics and research tools were further amplified by fears of increased costs from the acquisition of Edwards Lifesciences’ critical care products, which may impact profit margins. The cautious guidance for fiscal 2025, suggesting an organic revenue growth target of 4%-4.5%, is also causing investor hesitation.
Future Earnings Outlook
Looking ahead, analysts project that BDX’s EPS will grow 9.8% year-over-year to $14.43 for the fiscal year ending September 2025. The company has shown a positive earnings surprise history, exceeding consensus estimates in the last four quarters.
Analyst Recommendations
Among the 17 analysts covering BDX, sentiment remains strong, with a consensus rating of “Strong Buy.” This consensus reflects 14 “Strong Buy” ratings, one “Moderate Buy,” and two “Holds.” This outlook has improved slightly from three months ago when there were only 13 “Strong Buy” ratings.
Analyst Price Targets
On October 2, Evercore ISI analyst Vijay Kumar raised the price target for BDX to $290, maintaining an “Outperform” rating. This optimism is based on favorable trends in MedTech utilization and a robust capex outlook for the next year. The analyst also added Becton Dickinson to the firm’s “Tactical Outperform” list, anticipating positive results from their Q3 earnings alongside other companies in the MedTech and life sciences sectors.
Currently, BDX is trading below the average price target of $278.07, with the highest target set at $312, indicating a potential upside of 40.3% from its current price levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
