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Category: Stock Market and Becton Dickinson
Date: 5 November 2019 Stock Price: $260.70 We take a look at the 4th quarter earnings release of their 2019 fiscal year of Becton Dickinson one of the largest medical technology companies in the world. Is the stock of Becton Dickinson worth more than it was after the release of their 3rd quarter 2019 earnings report?
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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 4th quarter 2019 earnings report
The numbers we are interested in (for the quarter):
- Revenue: $4.584 billion (up from $4.402 billion from the same quarter of the previous year)
- Revenue increased by 4.1% over the last 12 months
- Total operating expenses: $4.473 billion (up from $3.826 billion for the same quarter of the previous year)
- Total operating expenses increased by 16.9% over the last 12 months
- Net earnings: $112 million (up from -$173 million for the same quarter of the previous year)
- Diluted income per share: $0.41 (up from -$0.64 for the same quarter of the previous year)
- Diluted weighted-average shares outstanding: 274.959 million (up from 268.500 million for the same quarter of the previous year)
- Cash and cash equivalents: $536 million
- Cash and cash equivalents per share: $1.94
- Cash and cash equivalents makes up 0.74% of Becton Dickinson's market capital
- Cash and cash equivalents makes up 1% of Becton Dickinson's total assets
- Inventories : $2.579 billion
- Inventories makes up 4.97% of Becton Dickinson's total assets
- Stockholders equity of Becton Dickinson: $21.177 billion
- Stockholders equity per share: $77
- Becton Dickinson is trading at 3.38 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 full fiscal 2019): $3.330 billion
- Cash generated from operations per share (for full fiscal 2019): $12.11
Becton Dickinson's management commentary on the results and earnings guidance
FRANKLIN LAKES, N.J., Nov. 5, 2019 /PRNewswire/ -- BD (Becton, Dickinson and Company) (NYSE: BDX), a leading global medical technology company, today reported quarterly revenues of $4.584 billion for the fourth fiscal quarter ended September 30, 2019. This represents an increase of 4.1 percent over the prior-year period. On a comparable, currency-neutral basis, revenues increased 6.2 percent over the prior-year period.
"We are very proud of our accomplishments in fiscal year 2019. Our performance this year demonstrates our ability to overcome multiple headwinds and deliver on our financial and operational goals," said Vincent A. Forlenza, chairman and CEO. "We enter fiscal 2020 with continued optimism. There are significant opportunities ahead to leverage the capabilities we've built to better serve our customers and their patients around the world. It has been a privilege to lead BD and our global team of talented associates. I'm confident that under Tom Polen's leadership the company will further accelerate its impact as BD enters its next phase of value creation."
"We are very proud of our accomplishments in fiscal year 2019. Our performance this year demonstrates our ability to overcome multiple headwinds and deliver on our financial and operational goals," said Vincent A. Forlenza, chairman and CEO. "We enter fiscal 2020 with continued optimism. There are significant opportunities ahead to leverage the capabilities we've built to better serve our customers and their patients around the world. It has been a privilege to lead BD and our global team of talented associates. I'm confident that under Tom Polen's leadership the company will further accelerate its impact as BD enters its next phase of value creation."
Geographic Results
As reported, fourth quarter revenues in the U.S. of $2.562 billion increased 4.6 percent over the prior-year period. On a comparable basis, U.S. revenues increased 4.9 percent over the prior-year period. Growth in the U.S. was driven by the Medication Management Solutions unit within the BD Medical segment, the Biosciences unit within the BD Life Sciences segment, and the Surgery and Urology and Critical Care units with the BD Interventional segment.
As reported, revenues outside of the U.S. of $2.022 billion increased 3.5 percent over the prior-year period. On a comparable, currency-neutral basis, revenues outside of the U.S. increased 7.9 percent over the prior-year period. International revenue growth was driven by performance in Europe, Asia Pacific and EMA.
For the twelve-month period ended September 30, 2019, U.S. revenues were $9.730 billion as reported, which represents an increase of 11.0 percent over the prior-year period. On a comparable basis, U.S. revenues of $9.726 billion increased 4.5 percent over the prior-year period. As reported, revenues outside of the U.S. of $7.560 billion increased 4.8 percent over the prior-year period. On a comparable, currency-neutral basis, revenues outside the U.S. of $7.555 billion increased 5.9 percent over the prior-year period.
Fiscal 2020 Outlook for Full Year
The company expects full fiscal year 2020 revenues to increase 4.0 to 4.5 percent as reported, or 5.0 to 5.5 percent on a currency-neutral basis.
The company expects full fiscal year 2020 adjusted diluted earnings per share to be between $12.50 and $12.65. This represents growth of approximately 9.5 to 11.0 percent on a currency-neutral basis over fiscal 2019 adjusted diluted earnings per share of $11.68, or growth of approximately 7.0 to 8.5 percent including the estimated unfavorable impact of foreign currency. Adjusted diluted earnings per share guidance includes an adverse impact of approximately 500 basis points related to the expiration of the Gore royalty.
Adjusted diluted earnings per share for fiscal 2020 excludes potential charges or gains that may be recorded during the fiscal year, such as, among other things, the non-cash amortization of intangible assets, acquisition-related charges, and certain tax matters. BD does not attempt to provide reconciliations of forward-looking non-GAAP earnings guidance to the comparable GAAP measure because the impact and timing of these potential charges or gains is inherently uncertain and difficult to predict and is unavailable without unreasonable efforts. In addition, the company believes such reconciliations would imply a degree of precision and certainty that could be confusing to investors. Such items could have a substantial impact on GAAP measures of BD's financial performance.
As reported, fourth quarter revenues in the U.S. of $2.562 billion increased 4.6 percent over the prior-year period. On a comparable basis, U.S. revenues increased 4.9 percent over the prior-year period. Growth in the U.S. was driven by the Medication Management Solutions unit within the BD Medical segment, the Biosciences unit within the BD Life Sciences segment, and the Surgery and Urology and Critical Care units with the BD Interventional segment.
As reported, revenues outside of the U.S. of $2.022 billion increased 3.5 percent over the prior-year period. On a comparable, currency-neutral basis, revenues outside of the U.S. increased 7.9 percent over the prior-year period. International revenue growth was driven by performance in Europe, Asia Pacific and EMA.
For the twelve-month period ended September 30, 2019, U.S. revenues were $9.730 billion as reported, which represents an increase of 11.0 percent over the prior-year period. On a comparable basis, U.S. revenues of $9.726 billion increased 4.5 percent over the prior-year period. As reported, revenues outside of the U.S. of $7.560 billion increased 4.8 percent over the prior-year period. On a comparable, currency-neutral basis, revenues outside the U.S. of $7.555 billion increased 5.9 percent over the prior-year period.
Fiscal 2020 Outlook for Full Year
The company expects full fiscal year 2020 revenues to increase 4.0 to 4.5 percent as reported, or 5.0 to 5.5 percent on a currency-neutral basis.
The company expects full fiscal year 2020 adjusted diluted earnings per share to be between $12.50 and $12.65. This represents growth of approximately 9.5 to 11.0 percent on a currency-neutral basis over fiscal 2019 adjusted diluted earnings per share of $11.68, or growth of approximately 7.0 to 8.5 percent including the estimated unfavorable impact of foreign currency. Adjusted diluted earnings per share guidance includes an adverse impact of approximately 500 basis points related to the expiration of the Gore royalty.
Adjusted diluted earnings per share for fiscal 2020 excludes potential charges or gains that may be recorded during the fiscal year, such as, among other things, the non-cash amortization of intangible assets, acquisition-related charges, and certain tax matters. BD does not attempt to provide reconciliations of forward-looking non-GAAP earnings guidance to the comparable GAAP measure because the impact and timing of these potential charges or gains is inherently uncertain and difficult to predict and is unavailable without unreasonable efforts. In addition, the company believes such reconciliations would imply a degree of precision and certainty that could be confusing to investors. Such items could have a substantial impact on GAAP measures of BD's financial performance.
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 $1125 a stock, and its currently it's trading at $260.70 Thats s return of 108.6% offered over the last 5 years.
The stock of Becton Dickinson is also trading at a lot closer to its 52 week high of $264.74 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 of Becton Dickinson is very positive.
The stock of Becton Dickinson is also trading at a lot closer to its 52 week high of $264.74 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 of Becton Dickinson is very positive.
Becton Dickinson (NYSE: BDX) stock price history over the last 5 years.
Recent coverage of Becton Dickinson
The extract below covers the latest news regarding Becton Dickinson's leadership changes as obtained from TheStreet.com
Medical device maker Becton Dickinson (BDX - Get Report) announced that CEO Vincent Forlenza will retire as chief on Jan. 28, 2020, and will be replaced by current President and Chief Operating Officer Thomas E. Polen. Polen also will be nominated for a director position at the annual shareholder meeting in January.
"Tom is a strategic, customer-centric executive, who brings tremendous energy, a deep understanding of the industry and health care technology, and a strong track record of delivering results," Forlenza said. Polen, 46 years old, oversees the company's three business segments and is credited with leading the $24 billion acquisition of C.R. Bard in 2017. He also led the $12 billion acquisition of CareFusion in 2015. He has been with the company for 18 years. "As we move ahead, I believe BD has significant opportunities to continue to accelerate growth and drive long-term value while delivering meaningful results for our customers, patients and shareholders," Polen said.
Read the full article here
Medical device maker Becton Dickinson (BDX - Get Report) announced that CEO Vincent Forlenza will retire as chief on Jan. 28, 2020, and will be replaced by current President and Chief Operating Officer Thomas E. Polen. Polen also will be nominated for a director position at the annual shareholder meeting in January.
"Tom is a strategic, customer-centric executive, who brings tremendous energy, a deep understanding of the industry and health care technology, and a strong track record of delivering results," Forlenza said. Polen, 46 years old, oversees the company's three business segments and is credited with leading the $24 billion acquisition of C.R. Bard in 2017. He also led the $12 billion acquisition of CareFusion in 2015. He has been with the company for 18 years. "As we move ahead, I believe BD has significant opportunities to continue to accelerate growth and drive long-term value while delivering meaningful results for our customers, patients and shareholders," Polen said.
Read the full article here
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 $254.40 a stock (up slightly from our 3rd quarter 2019 earnings report valuation of Becton Dickinson). 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 $254.40 Therefore we believe the a good entry point into the stock is below $228. 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 $254.40 Therefore we believe the a good entry point into the stock is below $228. We believe that the stock will trade mostly sideways in coming weeks and months since it is fully price according to our valuation models.