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Three Reasons Why You Should Hold BDX Stock in Your Portfolio Now

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Becton, Dickinson and Company (BDX - Free Report) , popularly known as BD, is well-poised for growth in the coming quarters, courtesy of its solid product portfolio. The optimism led by a solid third-quarter fiscal 2024 performance and a few strategic deals are expected to contribute further. However, macroeconomic concerns and stiff competition persist.

Over the past year, this Zacks Rank #3 (Hold) stock has lost 7.7% against the 0.6% rise of the industry and the S&P 500’s 33.7% growth.

The renowned medical technology company has a market capitalization of $69.30 billion. It projects 9.3% growth for the next five years and expects to maintain its strong performance. BD’s earnings surpassed estimates in three of the trailing four quarters and broke even once, with the average surprise being 6.2%.

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Let’s delve deeper.

Strategic Deals: BD has inked a few strategic agreements for its products over the past few months, raising our optimism. Last month, the company completed the earlier-announced acquisition of Edwards Lifesciences' Critical Care product group, which will be renamed BD Advanced Patient Monitoring.
In July, BD announced a global collaboration agreement with Quest Diagnostics to develop, manufacture and commercialize flow cytometry-based companion diagnostics intended to help select the best treatment for patients with cancer and other diseases.

Product Portfolio: We are upbeat about BD’s slew of product launches in recent times. Last month, the company announced the commercial release of the BD Neopak XtraFlow Glass Prefillable Syringe and the latest capacity expansion of the BD Neopak Glass Prefillable Syringe platform to serve the growing market for biologic therapies.

On the third quarter of fiscal 2024 earnings call in August, management stated that the company recently launched the next-generation female external catheter, PureWick Flex. Management also confirmed that BD is currently gearing up for the launch of the next-generation Pyxis in the second half of next year.

Strong Q3 Results: BD’s solid third-quarter fiscal 2024 results buoy our optimism. The company registered solid top-line results, along with improvements in organic revenues and bottom-line performances. Robust performances by all segments and both geographic regions (on an adjusted basis) were also recorded. Strength in most of BD’s segment’s business units during the reported quarter was also seen.

Downsides to BD's Stock

Macroeconomic Concerns: Global economic challenges, including rising inflation and volatile capital markets, among others, pose risks to the demand and pricing of BD’s products and services. These conditions can disrupt its supply chain, impact production, and increase its borrowing costs, affecting its business.

Stiff Competition: BD operates in an increasingly complex and challenging medical technology marketplace. Although technological advances and scientific discoveries have accelerated the pace of change in medical technology, the regulatory environment of medical products is becoming more complex and vigorous. Acquisitions and collaborations by and among companies seeking a competitive advantage also affect the competitive environment.

BDX's Estimate Trend

BD is witnessing a positive estimate revision trend for fiscal 2024. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 0.5% north to $13.11.

The Zacks Consensus Estimate for the company’s fourth-quarter fiscal 2024 revenues is pegged at $5.34 billion, indicating a 4.9% improvement from the year-ago quarter’s reported number.

Key Picks

Some better-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , The Cooper Companies, Inc. (COO - Free Report) and Boston Scientific Corporation (BSX - Free Report) .

DaVita, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated long-term growth rate of 17.5%. DVA’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 24.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.

DaVita’s shares have gained 70.8% compared with the industry’s 34.9% rise in the past year.

Cooper Companies, carrying a Zacks Rank of 2 (Buy) at present, has an estimated long-term growth rate of 11.4%. COO’s earnings surpassed estimates in three of the trailing four quarters and broke even once, with the average being 3.9%.

Cooper Companies has gained 36.9% compared with the industry’s 0.6% rise in the past year.

Boston Scientific, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 12.6%. BSX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 7.2%.

Boston Scientific’s shares have rallied 63.9% compared with the industry’s 25.3% rise in the past year.


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