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Here's Why You Should Hold Becton, Dickinson (BDX) Stock Now

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Here's Why You Should Hold Becton, Dickinson (BDX) Stock Now

Solid fiscal Q4 for Becton, Dickinson (BDX); headwinds apprehended in fiscal 2019.

Becton, Dickinson and Company BDX, also known as BD, is expected to benefit from solid fiscal fourth-quarter results and a slew of positive developments. However, a few headwinds are anticipated in fiscal 2019 along with product recall issues.

The stock currently has a Zacks Rank #3 (Hold).

What’s Deterring the Stock?

BD expects raw material pricing pressure, which increased in 2018, to accelerate into fiscal 2019, primarily due to resin price increases owing to a supply-constrained market.

Additionally, headwinds related to the sale of Advanced Bioprocessing and the divestitures to Merit Medical are likely to keep margins under pressure.

In the last reported quarter, management declared that BD has decided to discontinue its insulin infusion sets owing to a moderately-higher-than-anticipated rate of complaints associated with insertion that occurred during the pilot launch of the product.

Why Should You Retain BD

BD recently reported solid fiscal fourth-quarter results. Earnings per share came in at $2.93, beating the Zacks Consensus Estimate by a penny. Revenues totaled $4.4 billion outpacing the Zacks Consensus Estimate of $4.36 billion.

Notably, the company continues to gain from its core BD Medical and BD Life Sciences segments. Domestic and international revenues increased year over year as well.

A series of developments have been raising optimism as well.

The company recently announced the FDA 510(k) clearance of its Phoenix CPO detect test. (Read More: BD's FDA Nod for Phoenix Test Boosts Diagnostic Systems)

Additionally, BD announced the safety and efficacy data from its LUTONIX Drug-Coated Balloon, used for a below-the-knee (BTK) indication.

Last month, BD announced the availability of the BD MAX MDR-TB panel in Europe.

Shares of BD have rallied 7.3%, outperforming the industry’s growth of 3.7% in a year’s time. The current level is also higher than the S&P 500 index’s 6% rise.

Which Way Are Estimates Headed?

For the current quarter, the Zacks Consensus Estimate for earnings is pegged at $2.66, reflecting an increase of 7.3% on a year-over-year basis. The same for revenues is pinned at $4.11 billion, showing an increase of 33.6% year over year.

For the full year, the Zacks Consensus Estimate for revenues is at $17.45 billion, reflecting a rise of 9.2% year over year. However, the same for earnings stands at $12.15, showing growth of 10.4% year over year.

Becton, Dickinson and Company Price and Consensus

Becton, Dickinson and Company Price and Consensus | Becton, Dickinson and Company Quote

Key Picks

A few better-ranked stocks in the broader medical space are Stryker Corporation SYK, Masimo Corporation MASI and Veeva Systems VEEV.

Stryker has a long-term expected earnings growth rate of 10% and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here .

Masimo’s long-term earnings growth rate is projected at 14.6%. The stock carries a Zacks Rank #2.

Veeva Systems’ long-term earnings growth rate is estimated at 19.3%. The stock carries a Zacks Rank #2.

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

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