A Look at Becton Dickinson’s Valuation After Strong Quarterly Results and Upgraded Profit Forecast

Becton Dickinson (NYSE:BDX) just powered through its third-quarter results, with both revenue and profit coming in ahead of expectations. The medical devices maker saw sales surge in its drug-delivery unit, pushing medical revenues up 14%, and management responded by nudging their adjusted profit outlook higher for 2025. This combination of stronger numbers and an upbeat forecast may prompt investors to ask whether the fundamentals are now strong enough to overcome this year’s share price woes.

The market’s response was immediate, with Becton Dickinson shares jumping nearly 9% after earnings. Still, when taking a broader view, the stock is down around 14% in the past year and has trailed broader indexes for the past three years. Recent gains may signal building momentum, possibly reflecting growing investor confidence in the company’s ability to execute even in a shifting healthcare landscape.

With Becton Dickinson’s shares regaining some ground, the question arises: is there fresh value here, or is the market now reflecting all of this growth already?

Most Popular Narrative: 4.0% Undervalued

According to community narrative, Becton Dickinson is considered modestly undervalued. Analyst consensus projects that the company's fair value exceeds the current share price by approximately 4%, using a discount rate of 8.26%.

"The pending separation of the Biosciences and Diagnostic Solutions business will transform BD into a pure-play medical technology leader with a consumables-heavy portfolio (more than 90% of revenue). This change is expected to enable higher cash flow predictability and margin improvement. Anticipated aggressive share buybacks are also expected to support EPS growth."

Can Becton Dickinson really outpace peers with its future vision? The answer depends on ambitious profit margin expansion and financial targets that challenge expectations. Explore the core set of numbers and management goals that lead this narrative to present BD as a potential bargain in the current market. The factors behind this valuation may offer unexpected insights.

Result: Fair Value of $208.00 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent global trade headwinds and challenges from the planned business separation could undermine Becton Dickinson’s margin improvements and future earnings growth.

Find out about the key risks to this Becton Dickinson narrative.

Another View: Multiples Tell a Different Story

Looking at Becton Dickinson from another perspective, its current price-to-earnings ratio is higher than the industry average. This suggests the market may be assigning a premium compared to its peers. Could this indicate that optimism is already reflected in the share price, or is there more growth potential to uncover?

See what the numbers say about this price — find out in our valuation breakdown.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Becton Dickinson for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Becton Dickinson Narrative

If you see the numbers differently or want to form your own conclusions, you can easily build your own take in just a few minutes. So why not do it your way?

A great starting point for your Becton Dickinson research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

Looking for More Standout Investment Opportunities?

There’s a world of promising stocks out there waiting for you to seize the moment. Don’t settle for the usual. Instead, get ahead by hunting down investments tailored to your interests and goals. Check out these hand-picked ideas to expand your horizons and give your portfolio a fresh spark:

• Secure your financial future by tapping into companies with a track record for rewarding shareholders through dividend stocks with yields > 3%.
• Jump into the fast lane with innovators leading the charge in artificial intelligence by using our gateway to AI penny stocks.
• Benefit from beaten-down shares that could offer real value through a selection of top picks among undervalued stocks based on cash flows.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com