We are downgrading our recommendation on Becton, Dickinson (BDX) to Underperform. We believe the company’s disposable and consumable products remain vulnerable to slowdown in hospital, lab-testing and doctor-visit volumes in the U.S. and Europe.
Third-quarter fiscal 2010 earnings of $1.29 per share beat the Zacks Consensus Estimate by $0.04 while falling short of the year-ago earnings. While Becton’s focus on safety-engineered products gained momentum in the past (as health-care providers sought to reduce hospital acquired infections), the market is now saturated in the U.S. and slower growth is forecasted for the ex-U.S. markets.
Further, Becton competes with numerous niche players in a multitude of product lines. Our target price of $64 is based on a P/E of 12.6x our fiscal 2010 EPS estimate.
BECTON DICKINSO (BDX): Free Stock Analysis Report
BECTON DICKINSO (BDX): Free Stock Analysis Report
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