BDX - Becton Dickinson upgraded at KeyBanc on valuation execution

2023-04-12 11:34:09 ET

• Becton Dickinson ( NYSE: BDX ) trended higher Wednesday after KeyBanc Capital lifted its recommendation to Overweight from Sector Weight, citing its valuation and ability to reach long-term financial targets.
• Issuing a $304 per share target on the stock, the analyst Matthew Mishan argued that BDX is on track to deliver more consistent forex-neutral revenue growth of more than 5.5% over the next several years in line with its long-term target.
• “After 5 years of being fully range-bound, we believe BDX is finally capable of sustaining a breakout given more consistent execution toward LT financial targets and a reasonable valuation,” Mishan wrote.
• As for factors supporting the trend, Mishan cites new product launches, bolt-on M&A, favorable pricing, and the complete reintroduction of the company’s Alaris infusion pump.
• The analyst expects Becton Dickinson ( BDX ) to reach or exceed the operating margin target of 25% by FY25 and, citing its leverage and free cash flow generation, highlights the company’s potential to strike bolt-on M&A deals, given flexibility in capital allocation.
• “Its M&A strategy has been an upside driver of recent growth trends, and we believe there is a decent pipeline of potential targets,” Mishan wrote.
• Read: Seeking Alpha analyst Vader Capital issued a Buy rating on BDX in February following the company’s Q1 2023 results.

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