On Sep 3, we retained our Neutral recommendation on
CR Bard Inc.
) following its moderate second-quarter results.
Why the Retention?
On Jul 23, CR Bard posted second-quarter 2013 adjusted earnings
per share of $1.42, which beat the Zacks Consensus Estimate of
$1.38 by 2.90%. Although adjusted earnings declined 12% due to
higher investment-related expenses, it exceeded the company's
previously announced guidance of $1.35-$1.39 a share.
Revenues increased 2% (3% at constant exchange rate) on a
year-over-year basis to $759.9 million, which surpassed the Zacks
Consensus Estimate of $751 million. Sales in the U.S. improved
while international revenues were boosted by healthy growth in
CR Bard's earnings have also managed to beat the Zacks Consensus
Estimate in three out of the last four quarters, while meeting
the same in one quarter, with an average surprise of 1.77%.
However, over the past 30 days, the Zacks Consensus Estimate for
2013 and 2014 has moved down by 0.3% each to $5.97 and $7.63,
Although delayed, potential benefit from the Gore litigation,
along with expansion into emerging markets and aggressive
investments in R&D for new-product development, should enable
the company to drive growth in the long term. Further, the recent
divestment of the EP business and the Medafor acquisition should
help the company to streamline its underlying business and access
faster growing markets with higher returns.
However, the challenging Med-tech environment may continue to
affect BCR's organic growth 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.
In addition, the company continues to face procedure volume
headwind and competitive pressure in the end markets. Also,
product quality-related legal issues which led to a net loss in
the second quarter remain an area of concern.
ALIGN TECH INC (ALGN): Free Stock Analysis
BARD C R INC (BCR): Free Stock Analysis
COOPER COS (COO): Free Stock Analysis Report
MCKESSON CORP (MCK): Free Stock Analysis
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Other Stocks to Consider
BCR has a Zacks Rank #3 (Hold). While we remain on the sidelines
regarding CR Bard, other medical stocks that warrant a look
The Cooper Companies
). All these stocks carry a Zacks Rank #2 (Buy).