On Mar 13, we retained Neutral recommendation on
CR Bard Inc.
) following its fourth-quarter results. Despite the upbeat
results, the company's organic growth rate, especially in the
U.S., remains an area of concern.
Why the Retention?
On Jan 31, Bard posted fourth-quarter 2012 adjusted earnings
of $1.70 per share, which was flat year over year and surpassed
the Zacks Consensus Estimate of $1.67. The result exceeded the
company's guidance by a couple of cents. Revenues inched up 1%
(up 2% in constant currency) year over year to $762.6 million.
Revenues surpassed the Zacks Consensus Estimate of $756 million.
Reported revenues met the upper end of the company's
Bard's earnings have also managed to beat the Zacks Consensus
Estimate in three out of the last four quarters with an average
surprise of 0.94%. Over the past 60 days, the Zacks Consensus
Estimate has moved down drastically by 50 cents to $6.36 for 2013
but increased 10 cents to $7.62 for 2014.
Although accretive in the long term, Bard's latest
acquisitions appear expensive and might enhance
integration-related expenses in the short term. Further, we wait
to see how CR Bard utilizes the expected benefits from the Gore
However, the challenging Med-tech environment might further
add pressure going forward. Moreover, government-mandated
healthcare reforms in the U.S. have led to a less flexible
pricing environment and may pressurize prices across the board.
These apart, the company continues to face procedure volume
headwind in the domestic market.
Other Stocks to Consider
CR Bard has a Zacks Rank #3 (Hold). While we remain on the
sidelines regarding Bard, companies like
Medical Action Industries
) , carrying a Zacks Rank #1 (Strong Buy), as well as
The Cooper Companies
Becton, Dickinson and Company
) , which carry a Zacks Rank #2 (Buy), are expected to do well in
the medical industry.
BARD C R INC (BCR): Free Stock Analysis
BECTON DICKINSO (BDX): Free Stock Analysis
COOPER COS (COO): Free Stock Analysis Report
MEDICAL ACTION (MDCI): Free Stock Analysis
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