Report
Valens Research

BDX - Embedded Expectations Analysis - 2021 11 01

Becton, Dickinson and Company (BDX:USA) currently trades near recent averages relative to UAFRS-based (Uniform) earnings, with a 21.7x Uniform P/E. At these levels, the market is pricing in expectations for profitability to stabilize, but management may have concerns about their overall growth, margin recovery, and COVID-19 testing demand.

Specifically, management may lack confidence in their ability to sustain Interventional segment revenue growth, Medical Delivery Solutions (MDS) revenue growth, and overall business momentum. In addition, management may have concerns about the sustainability of COVID testing demand, the financial impact of excess and obsolete COVID testing inventory, and persisting flu season headwinds. Furthermore, they may lack confidence in their ability to meet Biosciences revenue growth guidance, mitigate revenue declines in the U.S. infusion systems business, and reverse margin declines. Moreover, management may be exaggerating their innovative capabilities, the improvements in their production quality and inventory levels, and the potential of Alaris' 510(k) clearance.
Underlying
Becton Dickinson and Company

Becton, Dickinson and Company is a medical technology company engaged in the development, manufacture and sale of a range of medical supplies, devices, laboratory equipment and diagnostic products. The company's segments are: BD Medical, which produces an array of medical technologies and devices that are used to help improve healthcare delivery in a range of settings; BD Life Sciences, which provides products for the safe collection and transport of diagnostics specimens, and instruments and reagent systems to detect a range of infectious diseases, healthcare-associated infections and cancers; and BD Interventional, which provides vascular, urology, oncology and surgical products.

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Valens Research
Valens Research

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