Morgan Stanley analyst Patrick Wood maintained a Buy rating on Becton Dickinson yesterday and set a price target of $196.00.
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Patrick Wood has given his Buy rating due to a combination of factors surrounding the strategic and financial benefits of Becton Dickinson’s recent transaction. The deal, structured as a Reverse Morris Trust with Waters Corporation, allows Becton Dickinson to focus on its core MedTech franchise, which is seen as a critical move for the company’s strategic vision. Financially, the transaction is expected to unlock significant value, with Becton Dickinson trading $925 million of EBITDA at a lower multiple for a higher valuation, resulting in approximately $8 billion of value unlocked.
Furthermore, the deal is projected to bring about substantial synergies, with $345 million in EBITDA synergies expected by Year 5. This includes $200 million in cost synergies by Year 3 and $290 million in revenue synergies by Year 5. Despite some initial market volatility and concerns over the complexity of the transaction, the long-term outlook appears favorable, with anticipated mid-teens adjusted EPS growth through 2030. The focus on capital allocation and returning cash to shareholders is also highlighted as a key factor in driving future value for Becton Dickinson.
Wood covers the Healthcare sector, focusing on stocks such as Steris, Abbott Laboratories, and Becton Dickinson. According to TipRanks, Wood has an average return of -1.1% and a 59.79% success rate on recommended stocks.