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Here's Why You Should Retain BD (BDX) Stock in Your Portfolio

Investors continue to be optimistic about BD (BDX) owing to its slew of regulatory approvals and strategic deals.

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This story originally appeared on Zacks

Becton, Dickinson and Company BDX, popularly known as BD, is well poised for growth in the coming quarters, backed by its slew of strategic deals over the past few months. A robust fourth-quarter fiscal 2021 performance, along with several regulatory approvals, is expected to contribute further. Significant consolidation and a stiff competitive landscape persist.

- Zacks

Over the past year, this Zacks Rank #3 (Hold) stock has gained 4.3% compared with 11.9% growth of the industry and 25.7% rise of the S&P 500.

The renowned medical technology company has a market capitalization of $71.11 billion. The company projects 7.3% growth for the next five years and expects to maintain its strong performance. BD has delivered an earnings surprise of 16.95% for the past four quarters, on average.

Zacks Investment ResearchImage Source: Zacks Investment Research

Let’s delve deeper.

Regulatory Approvals: We are optimistic about BD’s impressive progress on the regulatory front with respect to its products. The company, in October, received the FDA’s 510(k) clearance for expanded indications for the Rotarex Atherectomy System.

BD, in August, announced receipt of the FDA’s Emergency Use Authorization for the BD Veritor At-Home COVID-19 Test. The test is an over-the-counter rapid antigen test that utilizes the Scanwell Health mobile app to deliver reliable results in 15 minutes.

Strategic Deals: We are upbeat about BD’s slew of strategic deals over the past few months. The company, this month, acquired Venclose, Inc., which is expected to enable it to offer a more robust portfolio of solutions to physicians treating the full range of venous conditions.

BD, in October, announced the formation of a public-private partnership with the Biomedical Advanced Research and Development Authority (part of the U.S. Health and Human Services Office of the Assistant Secretary for Preparedness and Response) to support the development of a range of COVID-19 combination diagnostic tests for core laboratories, hospitals and at the point of care.

Strong Q4 Results: BD’s solid fourth-quarter fiscal 2021 results buoy our optimism. The company recorded robust segmental performances, along with solid geographical revenues, which are impressive. The launches of BD’s FACSymphony A1 Cell Analyzer and COR System are encouraging.

Downsides

Stiff Competition: BD faces significant competition from a wide range of companies. These include large medical device companies with multiple product lines, some of which may have greater financial and marketing resources, as well as firms that are more specialized than BD is with respect to particular markets or product lines. The company faces competition across all its product lines and in markets in which its products are sold.

Significant Consolidation: The medical technology industry has experienced considerable consolidation, resulting in companies with greater scale and market presence than BD. Traditional distributors are also manufacturers of medical devices, providing another source of competition.

Estimate Trend

BD is witnessing a positive estimate revision trend for 2021. In the past 90 days, the Zacks Consensus Estimate for its earnings has moved 0.6% north to $12.41.

The Zacks Consensus Estimate for the company’s first-quarter fiscal 2022 revenues is pegged at $4.76 billion, suggesting a 10.4% fall from the year-ago quarter’s reported number.

Key Picks

A few other better-ranked stocks in the broader medical space are Laboratory Corporation of America Holdings LH or LabCorp, Thermo Fisher Scientific Inc. TMO and AMN Healthcare Services AMN.

LabCorp, carrying a Zacks Rank #2 (Buy), reported third-quarter 2021 adjusted EPS of $6.82, which beat the Zacks Consensus Estimate by 42.9%. Revenues of $4.06 billion outpaced the consensus mark by 13.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

LabCorp has an estimated long-term growth rate of 10.6%. The company surpassed estimates in the trailing four quarters, the average surprise being 25.73%.

Thermo Fisher reported third-quarter 2021 adjusted EPS of $5.76, which surpassed the Zacks Consensus Estimate by 23.3%. Third-quarter revenues of $9.33 billion outpaced the Zacks Consensus Estimate by 12%. It currently carries a Zacks Rank #2.

Thermo Fisher has an estimated long-term growth rate of 14%. The company surpassed estimates in the trailing four quarters, the average surprise being 9.02%.

AMN Healthcare reported third-quarter 2021 adjusted EPS of $1.73, which surpassed the Zacks Consensus Estimate by 29.1%. Third-quarter revenues of $877.8 million outpaced the Zacks Consensus Estimate by 12.3%. It currently sports a Zacks Rank #1.

AMN Healthcare has an estimated long-term growth rate of 16.2%. The company surpassed estimates in the trailing four quarters, the average surprise being 19.51%.



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