C.R. Bard (BCR) headquartered in Murray Hill, New Jersey, operates in vascular, urology, oncology, and surgical specialty markets. These end markets should remain insulated from the current economic turmoil. Many of the company's products are used in interventional medicine, life-saving surgical procedures.
The company reported strong third quarter EPS ahead of management's guidance by three cents. Strong growth in the Vascular and Oncology businesses, improved margins, and lower share count drove EPS growth for the quarter.
Maintaining guidance it provided in December 2007, the company expects at least 10% revenue growth and 16% EPS growth in 2008, including acquired products. We expect new product flow and strong organic sales driven by an expanded sales force to drive full-year EPS a few cents ahead of current guidance. Stock buybacks could also play an important role.
Future quarters will be met with a headwind from foreign exchange. However, with less than a third of sales outside of the United States, the impact will be less than for the company's competitors.
Our estimates increase on the upside in the third quarter and additional revisions to our tax rate and share count. The stock currently trades at roughly 17.7x our 2008 expected EPS of $4.43. We believe the company should trade at the top of the comparables range, ahead of the industry mean. We apply a P/E/G valuation of 1.6x 2008. Our target remains at $99.00. Our rating remains Buy.
Read the full analyst report on BCR
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