On Feb 13, 2013, we retained
Becton, Dickinson and Company
) at Neutral after the company beat Zacks Consensus Estimates for
revenues and earnings in the first quarter fiscal 2013.
Why the Retention?
On Feb 5, Becton Dickinson posted first-quarter fiscal 2013
adjusted earnings of $1.35, reflecting a beat of 9.8% over the
Zacks Consensus Estimate. Revenues in the reported quarter rose
3.7% (up 5.2% in constant currency) year over year to $1,900.2
million, beating the Zacks Consensus Estimate of $1,864
Over the past 30 days, the Zacks Consensus Estimate for fiscal
2013 has moved up by just 8 cents to $5.72 while for fiscal 2014
it has edged up 5 cents to $6.20 during the same timeframe.
Based on encouraging first-quarter results, Becton Dickinson
revised its guidance for fiscal 2013. It now envisages reported
sales growth for fiscal 2013 in the range of 3.5% to 4% compared
with the prior guidance of 2% to 3%. The company forecasts
constant currency revenue growth in the range of 4% to 4.5%
compared with 3.5% to 4.5% earlier.
Becton Dickinson now expects reported earnings per share from
continuing operations for fiscal 2013 in a band of $5.69 and
$5.72 versus the earlier outlook of $5.58 and $5.64. The
projection implies year-over-year constant currency growth of
7.5% - 8% for fiscal 2013 or 10.5% - 11% after accounting for the
medical device tax implemented in Jan 2013. Further, Becton
Dickinson plans to repurchase $500 million of its shares in
fiscal 2013, subject to market conditions.
We remain cautious about Becton Dickinson due to the lack of
major short-term catalysts. The rising demand for safety-needle
products (with higher price points and margins) was the primary
driver of the company's past growth. This is not expected to
continue, given that the U.S. market is already largely
On the positive side, Becton Dickinson's preeminent global
healthcare products franchise is partly insulated from volatile
macroeconomic conditions and structural deficiencies elsewhere in
the healthcare delivery field.
Becton Dickinson faces a wide range of competitors, including
) in certain niches, in each of its three business segments. The
stock retains a Zacks Rank #2 (Buy).
Other Stocks to Consider
Medical Action Industries Inc.
The Cooper Companies Inc.
) currently retain Zacks Rank #1 (Strong Buy) and Zacks Rank #2
(Buy), respectively, and are expected to do well.
BAXTER INTL (BAX): Free Stock Analysis Report
BECTON DICKINSO (BDX): Free Stock Analysis
COOPER COS (COO): Free Stock Analysis Report
MEDICAL ACTION (MDCI): Free Stock Analysis
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