We retain our Neutral recommendation for
C.R. Bard
(
BCR
) following its mixed third quarter 2011 results. Earnings for the
quarter topped the Zacks Consensus Estimate while sales missed the
forecast.
Revenue rose 6% year over year, fueled by healthy contributions
from the company's Vascular and Oncology businesses, backed by
SenoRx acquisition and overseas operations.
C.R. Bard's well-diversified end-markets and vast product
portfolio insulate it from fluctuations in any single therapeutic
category. The company's resource depth and focused innovation are
its major competitive advantages. C.R. Bard's incremental R&D
investment should boost its pipeline and give way to product
innovation/differentiation.
C.R. Bard is also making prudent use of cash in the form of
acquisitions and share repurchases. During its third quarter call,
the company announced its acquisition of Colorado-based Medivance
Inc for roughly $250 million. The acquisition augurs well with C.R.
Bard's business model and will boost its offerings in the critical
care settings (including myocardial infarction, traumatic brain
injury and stroke).
We expect new products to drive organic revenue growth and help
C.R. Bard to meet its sales objective. The new Ventralex ST
umbilical hernia repair product, Ventrio ST ventral hernia repair
system and the Echo PS mesh positioning system should support
growth going ah ead.
However, heightened competition and pricing/procedure volume
pressure remain areas of concern. C.R. Bard faces a mix of
competitors ranging from large manufacturers with multiple business
lines like
Boston Scientific
(
BSX
) and
Johnson & Johnson
(
JNJ
) to smaller manufacturers that offer a limited selection of
products like
Angiodynamics
(
ANGO
).
Moreover, a soft U.S. market may continue to weigh on the
company's results. Our recommendation on the stock is in tandem
with a short-term Zacks #3 Rank (Hold).
ANGIODYNAMICS (
ANGO
): Free Stock Analysis Report
BARD C R INC (
BCR
): Free Stock Analysis Report
BOSTON SCIENTIF (
BSX
): Free Stock Analysis Report
JOHNSON & JOHNS (
JNJ
): Free Stock Analysis Report
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