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Will Becton, Dickinson (BDX) Earnings Pull a Surprise in Q3? - Analyst Blog

Zacks Equity Research
Updated

Becton, Dickinson and Company BDX is set to report third-quarter fiscal 2015 earnings results on Aug 6. Last quarter, Becton, Dickinson, popularly known as BD, beat the Zacks Consensus Estimate by almost 4.6% (7 cents). We note that on an average, the company has recorded a positive earnings surprise of 3.3% through the last four quarters.

Let’s see how things are shaping up prior to this announcement.

Factors at Play

Unfavorable foreign exchange is expected to remain a headwind in the to-be reported quarter. Moreover, lower demand for health care products as well as higher hospital and lab-testing expenditures raise concern.

Nevertheless, Becton, Dickinson’s expanding product portfolio is a key catalyst in our view. The company’s expansion into overseas markets, in particular, the emerging markets, is also a positive.

Moreover, the Carefusion merger has opened up significant opportunities for Becton, Dickinson. The combined manufacturing footprint and operations along with lower overhead expenses should result in significant cost savings, going forward.

Earnings Whispers?

Our proven model does not conclusively show that Becton, Dickinson is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Becton, Dickinson has a 0.00% ESP. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $2.01.

Zacks Rank: Becton, Dickinson’s Zacks Rank #3 increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of an earnings beat.

Stocks to Consider

Here are some companies you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:  

Agios Pharmaceuticals AGIO with an Earnings ESP of +75% and a Zacks Rank #1.

TransEnterix TRXC with an Earnings ESP of +7.14% and a Zacks Rank #2.

HCA Holdings HCA with an Earnings ESP of +1.48% and a Zacks Rank #2.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
BECTON DICKINSO (BDX): Free Stock Analysis Report
 
AGIOS PHARMACT (AGIO): Free Stock Analysis Report
 
HCA HOLDINGS (HCA): Free Stock Analysis Report
 
TRANSENTERX INC (TRXC): Free Stock Analysis Report
 
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Zacks Investment Research