Shares of Becton, Dickinson and Company BDX, more commonly known as BD, rallied to a new 52-week high of $156.11 on Dec 16, eventually closing at $155.89. The company has returned 11% in the past one year and roughly 12% year-to-date. Average volume of shares traded over the last three months was approximately 1,006,450.
What’s Behind the Rally?
We note that the CareFusion takeover has opened up significant opportunities for BD. The combined company has already delivered strong top-line results over the past two quarters. The momentum is expected to continue on combined synergies. For fiscal 2016, the company expects adjusted EPS of $8.73–$8.80, reflecting operational accretion of about 22% from the CareFusion takeover.
The combined company of late, has been focusing on expanding its product portfolio, which we believe, is a key factor driving the stock price. A wider range of product offerings will help drive the top line of the company.
The company recently introduced BD FACSCelesta flow cytometer at the 2015 American Society for Cell Biology annual meeting. The solution is primarily designed to allow more insightful single cell studies and improve data quality. The solution, along with BD Horizon Brilliant polymer dyes, facilitates superior resolution of cell population, which went unnoticed previously.
BD also recently received FDA clearance for two Vertebral Balloon Systems (VBS) which are 13-gauge AVAmax VBS and 11-gauge AVAflex VBS. Notably, the products have been developed by CareFusion, which was taken over by BD in Mar 2015. Meanwhile, BD plans to fully roll out the products within a year. Notably, these spine augmentation devices are designed to reduce and stabilize spinal fractures and consequently offer instant and extended respite from pain.
Additionally, BD launched an intravenous (IV) medication management solution at the 50th Annual American Society of Health-system Pharmacists (ASHP) Midyear Clinical Meeting. The new solution will help bring down unnecessary expenditures on infusions, which are never utilized. The new solution incorporates technologies from BD and CareFusion.
Estimate Revisions
Over the last 60 days, the Zacks Consensus Estimate for BD remained flat at $8.40 per share for 2016; while the same inched up 0.7% to $9.54 for 2017. These estimates represent year-over-year growth of 17.3% for 2016 and 13.6% for 2017.
Zacks Rank & Key Picks
BD carries a Zacks Rank #3 (Hold).
A couple of better-ranked stocks in the same space include Masimo MASI, Steris Plc STE and Natus Medical BABY. All the stocks sport a Zacks Rank #1 (Strong Buy).
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