Becton, Dickinson and Company (BDX Quick QuoteBDX - Free Report) , popularly known as BD, has been gaining on the back of a few strategic deals over the past few months. A robust second-quarter fiscal 2022 performance, along with a few regulatory approvals, is expected to contribute further. Forex woes and significant consolidation persist.

Over the past year, this Zacks Rank #2 (Buy) stock has lost 5.6% compared with 11.8% fall of the industry and 12.9% decline of the S&P 500.

The renowned medical technology company has a market capitalization of $66.75 billion. It projects 6.6% growth for the next five years and expects to maintain its strong performance. BD has delivered an earnings surprise of 12.9% for the past four quarters, on average.

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Let’s delve deeper.

Regulatory Approvals: BD has been progressing impressively on the regulatory front, raising our optimism. The company, in June, received the CE Mark for the BD MAX Respiratory Viral Panel, which is the new molecular diagnostic combination test for SARS-CoV-2, Influenza A + B and Respiratory Syncytial Virus from the company.

During the fiscal 2022 second-quarter earnings call in May, BD confirmed that its Aspirex mechanical aspiration thrombectomy system is currently under the FDA’s review and is expected to launch in the second half of fiscal 2022.

Strategic Deals: We are upbeat about BD’s slew of strategic deals over the past few months. The company, in June, announced a partnership with CerTest Biotec, which is aimed at developing a molecular diagnostic test for the monkeypox virus.

Also in June, BD, along with Frazier Healthcare Partners, entered into a definitive agreement for the former to acquire Parata Systems. The buyout will likely expand BD’s presence in the global pharmacy automation space and complement its Medication Management Solutions business unit.

Strong Q2 Results: BD’s solid second-quarter fiscal 2022 results buoy our optimism. Improvement in the overall top line and base revenues was impressive. Robust performances by most segments and in the United States were encouraging. BD’s completion of the Embecta Corp. (embecta) spin of its former Diabetes Care business also augurs well. Gross margin expansion is a plus. A raised revenue outlook for the full fiscal year is also promising.

Downsides

Significant Consolidation: The medical technology industry has been experiencing a significant amount of consolidation, resulting in companies with greater scale and market presence than BD. As a result, competition among medical device suppliers to provide goods and services has increased. Further consolidation in the industry could intensify competition among medical device suppliers and exert additional pressure on the demand for and prices of BD’s products.

Foreign Exchange: BD generates a substantial amount of its revenues from international operations. 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 such risks.

Estimate Trend

BD is witnessing a negative estimate revision trend for 2022. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 12.4% south to $11.20.

The Zacks Consensus Estimate for the company’s third-quarter fiscal 2022 revenues is pegged at $4.46 billion, suggesting an 8.8% fall from the year-ago quarter’s reported number.

Other Key Picks

A few other stocks in the broader medical space that investors can consider are AMN Healthcare Services, Inc. (AMN Quick QuoteAMN - Free Report) , Patterson Companies, Inc. (PDCO Quick QuotePDCO - Free Report) and McKesson Corporation (MCK Quick QuoteMCK - Free Report) .

AMN Healthcare, flaunting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 1.1%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 15.6%.

You can see the complete list of today’s Zacks #1 Rank stocks here.

AMN Healthcare has gained 22.7% against the industry’s 33.6% fall in the past year.

Patterson Companies, sporting a Zacks Rank #1 at present, has an estimated long-term growth rate of 9.6%. PDCO’s earnings surpassed estimates in all the trailing four quarters, the average beat being 16.5%.

Patterson Companies has lost 0.9% compared with the industry’s 11.8% fall over the past year.

McKesson, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 9.5%. MCK’s earnings surpassed estimates in three of the trailing four quarters, the average beat being 19.5%.

McKesson has gained 72.6% against the industry’s 11.8% fall over the past year.