Becton, Dickinson (BDX) operates three business segments that provide disposable/consumable products to the medical community. We believe the majority of these product markets should remain relatively insulated from the current economic turmoil.
The company's focus on safety-engineered products has gained momentum as healthcare providers seek to reduce hospital-acquired infections and governments require tighter operating standards. This has provided Becton, Dickinson with a strong position in the industry.
At the current price, shares of Becton, Dickinson trades at 16.2x our fiscal year 2008 estimate of $4.45, a discount to the average 16.7x 2008 multiple of medical supply peers and roughly a 20% discount to the group average 1.5x 2008 P/E/G. We believe this name should trade inline with the group and are raising our valuation to a 1.5x 2008 P/E/G.
This brings our target price to $85.50, providing investors with an expected potential near-term return of approximately 19% should the current stock price rise to our target price.
Read the full analyst report on BDX
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