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Category: Stock Market and Becton Dickinson
Date: 22 September 2019 Stock Price: $253.55 We take a look at the 3rd quarter earnings release of their 2019 fiscal year of Becton Dickinson one of the largest medical technology companies in the world.
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About Becton Dickinson
BD is one of the largest global medical technology companies in the world and is advancing the world of health by improving medical discovery, diagnostics and the delivery of care. The company supports the heroes on the frontlines of health care by developing innovative technology, services and solutions that help advance both clinical therapy for patients and clinical process for health care providers. BD and its 65,000 employees have a passion and commitment to help enhance the safety and efficiency of clinicians' care delivery process, enable laboratory scientists to accurately detect disease and advance researchers' capabilities to develop the next generation of diagnostics and therapeutics. BD has a presence in virtually every country and partners with organizations around the world to address some of the most challenging global health issues. By working in close collaboration with customers, BD can help enhance outcomes, lower costs, increase efficiencies, improve safety and expand access to health care.
Overview Becton Dickinson's latest earnings report
The numbers we are interested in (for the quarter):
- Revenue: $4.350 billion (up from $4.278 billion from the same quarter of the previous year)
- Revenue increased by 1.68% over the last 12 months
- Total operating expenses: $3.725 billion (down from $3.767 billion for the same quarter of the previous year)
- Total operating expenses decreased by -1.11% over the last 12 months
- Net earnings: $451 million (down from $556 million for the same quarter of the previous year)
- Diluted income per share: $1.51 (down from $2.03 for the same quarter of the previous year)
- Diluted weighted-average shares outstanding: 274.336 million (up from 273.925 million for the same quarter of the previous year)
- Cash and cash equivalents: $523 million
- Cash and cash equivalents per share: $1.91
- Cash and cash equivalents makes up 0.75% of Becton Dickinson's market capital
- Cash and cash equivalents makes up 1% of Becton Dickinson's total assets
- Inventories : $2.629 billion
- Inventories makes up 5% of Becton Dickinson's total assets
- Stockholders equity of Becton Dickinson: $21.497 billion
- Stockholders equity per share: $78.36
- Becton Dickinson is trading at 3.22 times its stockholders equity per share. It is trading within the expected range of between 2 to 4 times stockholders equity most firms trade at.
- Cash generated from operations (for 9 months): $1.071 billion
- Cash generated from operations per share (for 9 months): $3.9
Becton Dickinson's management commentary on the results and earnings guidance
FRANKLIN LAKES, N.J., Aug. 6, 2019 /PRNewswire/ -- BD (Becton, Dickinson and Company) (NYSE: BDX), a leading global medical technology company, today reported quarterly revenues of $4.350 billion for the third fiscal quarter ended June 30, 2019. This represents an increase of 1.7 percent over the prior-year period. On a comparable, currency-neutral basis, revenues increased 5.7 percent over the prior-year period.
"Third quarter performance was strong. Our revenues highlight the breadth and diversity of the growth drivers in our portfolio, and we are seeing strength across all three segments," said Vincent A. Forlenza, chairman and CEO. "As anticipated, our performance has accelerated and we expect this momentum to continue. We remain confident in our outlook for fiscal year 2019 and our ability to deliver value to customers and shareholders."
Fiscal 2019 Outlook for Full Year
The company reaffirms its full fiscal year 2019 revenue and adjusted diluted earnings per share guidance.
As reported, the company continues to expect full fiscal year 2019 revenues to increase 8.0 to 9.0 percent. The company continues to estimate full fiscal year 2019 revenues will increase 5.0 to 6.0 percent on a comparable, currency-neutral basis. The company continues to expect adjusted diluted earnings per share to be between $11.65 and $11.75. This represents growth of approximately 12.0 percent on a currency-neutral basis over fiscal 2018 adjusted diluted earnings per share of $11.01, or growth of approximately 6.0 to 7.0 percent including the estimated unfavorable impact of foreign currency.
The image below shows a few of Becton Dickinson's business highlights for Q3 of their 2019 fiscal year.
"Third quarter performance was strong. Our revenues highlight the breadth and diversity of the growth drivers in our portfolio, and we are seeing strength across all three segments," said Vincent A. Forlenza, chairman and CEO. "As anticipated, our performance has accelerated and we expect this momentum to continue. We remain confident in our outlook for fiscal year 2019 and our ability to deliver value to customers and shareholders."
Fiscal 2019 Outlook for Full Year
The company reaffirms its full fiscal year 2019 revenue and adjusted diluted earnings per share guidance.
As reported, the company continues to expect full fiscal year 2019 revenues to increase 8.0 to 9.0 percent. The company continues to estimate full fiscal year 2019 revenues will increase 5.0 to 6.0 percent on a comparable, currency-neutral basis. The company continues to expect adjusted diluted earnings per share to be between $11.65 and $11.75. This represents growth of approximately 12.0 percent on a currency-neutral basis over fiscal 2018 adjusted diluted earnings per share of $11.01, or growth of approximately 6.0 to 7.0 percent including the estimated unfavorable impact of foreign currency.
The image below shows a few of Becton Dickinson's business highlights for Q3 of their 2019 fiscal year.
Becton Dickinson (NYSE: BDX) stock price history
The image below, obtained from Google, shows the stock price history of Becton Dickinson (NYSE: BDX) over the last 5 year. And it's been a good time for Becton Dickinson stockholders. 5 years ago the stock of Becton Dickinson was trading at $114 a stock, and its currently it's trading at $253.55 Thats s return of 122% offered over the last 5 years. The stock is also trading at a lot closer to its 52 week high of $265.87 than it is to its 52 week low of $208.62 which to us is a clear indication that the short term sentiment and momentum of the stock is overwhelmingly positive.
Becton Dickinson (NYSE: BDX) latest stock valuation
So based on the earnings report of Becton Dickinson (NYSE: BDX) and the latest earnings guidance provided what do we value Becton Dickinson (BDX) stock at? Based on their latest earnings and the outlook provided by the group our target (full value) price for Becton Dickinson at $249.80 a stock. We therefore believe the stock of Becton Dickinson is fully valued
We usually suggest long term fundamental and value investors look to enter the stock at least 10% below our target price, which in this case is $249.80 Therefore we believe the a good entry point into the stock is below $224.80. We believe that the stock will trade mostly sideways in coming weeks and months since it is fully price according to our valuation models.
We usually suggest long term fundamental and value investors look to enter the stock at least 10% below our target price, which in this case is $249.80 Therefore we believe the a good entry point into the stock is below $224.80. We believe that the stock will trade mostly sideways in coming weeks and months since it is fully price according to our valuation models.