Becton, Dickinson and Company Upped to Buy

On Feb 5, Zacks Investment Research upgraded Becton, Dickinson and Company (BDX) to a Zacks Rank #2 (Buy).

Why the Upgrade?

Becton, Dickinson’s adjusted earnings per share of $1.42 for the first quarter of fiscal 2014 (ended Dec 31, 2013), reported on Feb 4, surpassed the Zacks Consensus Estimate of $1.29 per share by 10.08%.

Becton, Dickinson recorded healthy growth owing to favorable timing of orders from both its BD Medical and BD Diagnostics segments. Revenues in the reported quarter went up 6.1% to $2,015 million, also exceeding the Zacks Consensus Estimate of $1,979 million.

Though the company experienced stabilization in the U.S. market, it witnessed robust growth in emerging markets accompanied with improvements in Europe.

Based on its progress, Becton, Dickinson continues to expect revenue growth in the range of 4% to 5%, both in reported and constant currency. On the other hand, it anticipates adjusted earnings per share to range between $6.19 and $6.22 for the year (compared with the prior expectations of $6.16 to $6.22), reflecting a year-over-year growth of 6.5–7% over fiscal 2013. The current Zacks Consensus Estimate of $6.22 lies within the guidance range.

Becton, Dickinson has witnessed a flurry of upward estimate revisions in the past 30 days. Twelve upward revisions have been observed over the same time span for fiscal 2014 with no reverse movements.

The company’s prime focus is to continue with its long-term strategy of innovation in order to enhance growth. Becton, Dickinson seeks to generate higher revenues by offering new complete solutions to its customers, simultaneously expanding its geographic reach to gain additional customers.

We believe that the decision to invest in its long term strategy of innovation will give Becton, Dickinson a solid platform for future growth. The strong future growth potential at Becton, Dickinson reinforces investors’ confidence in the stock.

Other Stocks to Consider

Investors interested in the medical supplies industry can also look at stocks like Align Technology Inc. (ALGN), CR Bard Inc. (BCR) and Cardinal Health, Inc. (CAH). All these stocks carry the same Zacks Rank as Becton, Dickinson.

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