BDX - ICU Medical: There Is Still Upside Here As Management Goes Big To Drive Value

• ICU Medical starts off 2022 with the considerable task of integrating Smiths Medical, a $2.35B deal that significantly expands ICUI's infusion business and adds complementary assets in other departments.
• In addition to leveraging even more scale, the Smiths deal gives ICU a more compelling portfolio of products and opportunities to drive cost synergies in manufacturing, R&D, and marketing.
• Hospital staffing shortages and a backlog of elective procedures likely limit ICUI's ability to exploit rival BD's Alaris recall to gain share, but adding Smiths enhances long-term competitiveness.
• Operating synergies should provide a path to ICUI shares trading at 3.35x-3.5x sales in FY'24, and the shares look undervalued today below $265.

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