Becton, Dickinson and Company BDX is set to report first-quarter fiscal 2017 earnings results on Feb 2.
Becton, Dickinson has an impressive track of comfortably beating estimates in each of the four trailing quarters. In the last reported quarter, it recorded a positive earnings surprise of 1.44%, bringing the four-quarter average to 6.08%. Over the past three months, Becton, Dickinson returned almost 4.36%, which is lower than the Zacks categorized Medical/Dental Supplies sub-industry’s gain of roughly 6.24%. However, Becton, Dickinson has a decent earnings surprise history, as evident from the chart below.
Factors at Play
Becton, Dickinson's innovative product pipeline is a key catalyst in our view. A plethora of regulatory approvals both in the U.S. and International markets are helping the company to rapidly expand its product portfolio.
Management at Becton, Dickinson expects strong demand for its Pyxis ES platform and infusion pumps to be the primary growth drivers in the fiscal first quarter.
Additionally, partnerships and collaborations are providing the company a competitive edge. Moreover, the CareFusion merger has unlocked considerable growth and cost saving opportunities for Becton, Dickinson.
However, an unfavorable foreign exchange rate is anticipated to remain a headwind for the rest of year. Tough year-over-year comparisons in the fiscal first quarter also pose as concerns.
Earnings Whispers
Our proven model does not conclusively show that Becton, Dickinson is likely to beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Becton, Dickinson currently has an Earnings ESP of -0.47%. This is because the Most Accurate estimate stands at $2.10 and the Zacks Consensus Estimate is pegged at $2.11. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Becton, Dickinson has a Zacks Rank #3 which increases the predictive power of ESP. However, a negative ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are a few companies that you may want to consider instead, as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Cempra Inc. CEMP has an Earnings ESP of +15.79% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Molina Healthcare Inc. MOH has an Earnings ESP of +5.33% and a Zacks Rank #2.
Universal Health Services, Inc. UHS has an Earnings ESP of +4.97% and a Zacks Rank #2.