Becton, Dickinson and Company BDX, 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 fourth-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 6.9% against the 0.3% rise of the industry and the S&P 500’s 26% growth.
The renowned medical technology company has a market capitalization of $66.26 billion. It projects 9.6% growth for the next five years and expects to maintain its strong performance. BD’s earnings surpassed estimates in all the trailing four quarters, with an average surprise of 6.5%.
Zacks Investment Research
Image Source: Zacks Investment Research
Factors Favoring BDX’s Growth
Robust Product Launches: BD has recently introduced several innovative products, signaling strong momentum in its portfolio expansion. In October, the company launched the BD Intraosseous Vascular Access System for rapid delivery of fluids or medication in critical emergencies. It also debuted the BD OMICS-One XT Library Preparation Reagent Kits, the first in a series of high-throughput, robotics-compatible reagent kits developed in collaboration with Hamilton, featuring the BD OMICS-One XT WTA Assay and the Hamilton Microlab NGS STAR automated liquid handling platform. Earlier, in September, BD unveiled the BD Neopak XtraFlow Glass Prefillable Syringe and expanded its BD Neopak Glass Prefillable Syringe platform to address the increasing demand for biologic therapies.
During the fiscal fourth-quarter earnings call, BD highlighted plans for more than 25 new product launches in fiscal 2025. Notably, in BD Medical, the company is set to roll out its next-generation Pyxis platform by late 2025. This advanced system, featuring hardware and software upgrades, will leverage BD's new AI platform to integrate data across its smart devices, ensuring a seamless user experience. Management emphasized that the Pyxis platform will see phased upgrades and releases over the coming years.
Strategic Deals: BD has been making impressive progress in inking strategic deals over the past few months. In September, it 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.
Strong Q4 Results: BD exited the fourth quarter of fiscal 2024 with better-than-expected results. Solid top-line results, along with improvements in organic revenues and bottom-line performances, were impressive. Robust performances by all segments and both geographic regions were encouraging. Strength in BD’s segments' business units during the reported quarter was also promising. The expansion of both margins bodes well. Robust product adoption raises optimism.
Factors That May Offset the Gains for BDX
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.
Estimate Trend
BD is witnessing a positive estimate revision trend for fiscal 2025. In the past 60 days, the Zacks Consensus Estimate for its earnings has moved 13 cents north to $14.43 per share.
The Zacks Consensus Estimate for the company’s first-quarter fiscal 2025 revenues is pegged at $5.11 billion, indicating an 8.6% improvement from the year-ago quarter’s reported number.
Key Picks
Some better-ranked stocks in the broader medical space are Masimo MASI, Accuray ARAY and Abbott Laboratories ABT.
Masimo, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 11.8% for 2025. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
MASI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 17.10%. Its shares have risen 31.7% against the industry’s 1% decline in the past six months.
Accuray, carrying a Zacks Rank #2 at present, has an estimated growth rate of 1200% for 2025. Its earnings missed estimates in three of the trailing four quarters and met in one, delivering an average negative surprise of 141.97%.
ARAY’s shares have gained 8.8% against the industry’s 1% decline in the past six months.
Abbott, carrying a Zacks Rank of 2 at present, has an estimated earnings growth rate of 10% for 2025. It delivered a trailing four-quarter average earnings surprise of 1.64%.
ABT’s shares have risen 8.5% in the past six months compared with the industry’s 7.2% growth.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
