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BD (BDX) Hits a New 52-Week High: What's Behind the Rally?

·4-min read

Shares of Becton, Dickinson and Company BDX, popularly known as BD, reached a new 52-week high of $268.55 on Jan 20, before closing the session marginally lower at $263.97.

Over the past year, this Zacks Rank #3 (Hold) stock has gained 2% compared with 2.7% growth of the industry and 18.4% rise of the S&P 500 composite.

BD is witnessing an upward trend in its stock price, prompted by its slew of strategic acquisitions over the past few months. The company’s robust fourth-quarter fiscal 2021 performance, along with a few regulatory approvals, buoys optimism. Forex woes and a stiff competitive landscape are the major downsides.

Zacks Investment Research
Zacks Investment Research

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Let's delve deeper.

Key Growth Drivers

Regulatory Approvals: Investors are optimistic about BD’s impressive progress on the regulatory front with respect to its products. The company, this month, received the 510(k) clearance from the FDA for the BD Kiestra IdentifA system. The system has been developed to automate the preparation of microbiology bacterial identification testing.

BD, in October, received the FDA’s 510(k) clearance for expanded indications for the Rotarex Atherectomy System.

Strategic Buyouts: Investors are upbeat about BD’s slew of strategic acquisitions over the past few months. The company, in December 2021, completed the acquisition of privately held Scanwell Health Inc. BD’s management believes that the acquisition will enable the company to expand and scale up its digital capabilities in-house in order to speed up the time to market transformative at-home solutions at present as well as in the future.

The same month, BD acquired Tissuemed, Ltd. The buyout enables BD to integrate Tissuemed's lead product, Tissuepatch, into its surgical solutions portfolio.

Strong Q4 Results: BD’s solid fourth-quarter fiscal 2021 results buoy investors’ optimism. The company recorded robust segmental performances, along with solid geographical revenues. 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. This includes 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 of its product lines and in markets where its products are sold.

Foreign Exchange: BD generates a substantial amount of its revenues from international operations and also anticipates that a significant portion of its sales will continue to come from outside the United States in the future. The revenues BD reports with respect to its operations outside the United States may be adversely affected by fluctuations in foreign currency exchange rates. BD cannot predict with any certainty changes in foreign currency exchange rates or the degree to which it can mitigate these risks.

Key Picks

A few stocks from the broader medical space that investors can consider are AMN Healthcare Services, Inc. AMN, Cerner Corporation CERN and Catalent, Inc. CTLT.

AMN Healthcare has an estimated long-term growth rate of 16.2%. AMN’s earnings surpassed estimates in the trailing four quarters, the average surprise being 19.51%. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AMN Healthcare has gained 28.7% against the industry’s 60.3% fall over the past year.

Cerner, carrying a Zacks Rank #2 (Buy), has an estimated long-term growth rate of 12.8%. CERN’s earnings surpassed estimates in three of the trailing four quarters, the average surprise being 3.21%.

Cerner has gained 14.5% against the industry’s 56.3% fall over the past year.

Catalent has an estimated long-term growth rate of 16.9%. CTLT’s earnings surpassed estimates in the trailing four quarters, the average surprise being 9.88%. It currently carries a Zacks Rank #2.

Catalent has lost 12.7% compared with the industry’s 32% fall over the past year.


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Becton, Dickinson and Company (BDX) : Free Stock Analysis Report

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Catalent, Inc. (CTLT) : Free Stock Analysis Report

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