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Quote this valuation with its source: Fair value, Potential value and the price at analysis.
FAQ
BDX — frequently asked questions
Is Becton Dickinson and Company overvalued?
In our latest published analysis dated 2026-10-02, BDX looks modestly undervalued. The price recorded at analysis is 177 USD versus our fair value of 195 USD; the high endpoint is presented separately as potential value of 324 USD. That implies roughly 10.1% upside to fair value at that date.
Our latest published report, analyzed 2026-10-02, gives BDX a fair value of 195 USD and a potential value of 324 USD. The conclusion is triangulated across multiple valuation models and weighted by reliability for Becton Dickinson and Company's archetype; it is a dated research output, not a live price.
Should I buy BDX now?
Our latest published rating for BDX, analyzed 2026-10-02, is Hold. Becton Dickinson and Company looks modestly undervalued at the analysis-date price of 177 USD versus fair value of 195 USD; potential value is 324 USD. This is research for educational purposes, not personalized investment advice.
What are the biggest risks for BDX?
The dedicated bear-case section in our report analyzed 2026-10-02 documents Becton Dickinson and Company's material risks, evidence, thresholds, and thesis-invalidation conditions. Scenario-specific explanations remain in that section so the report does not repeat or decontextualize them elsewhere.
What is BDX's rating?
Our latest published rating for BDX, analyzed 2026-10-02, is Hold, with a published moat assessment of 7.2/10 (Narrow). It reflects our fair value of 195 USD, the potential value of 324 USD, and the price recorded at analysis (177 USD).
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§1 Resumen ejecutivoEN
Respuesta en 30 segundosHold
Precio frente a valor
Precio
$176.80
Valor razonable
$194.59
Valor potencial
$323.86
A fecha de
2026-10-02
Por qué puede funcionar
Accelerated market share capture in core injection, infusion, and vascular access consumables following competitor manufacturing disruptions, combined with operational productivity gains that expand operating margins toward 14% and unlock Potential value of $323.86.
Qué cambiaría nuestra opinión
Refinancing upcoming debt maturities of $2,228M within 12 months and $3,163M in year 2 in an elevated interest rate environment where pre-tax debt costs exceed 6.43%.
We maintain a Hold rating on Becton Dickinson and Company at a report-date price of $176.80 as of October 2, 2026, offering a 10.06% implied return to our Fair value of $194.59, as durable hospital consumable cash flows are balanced by debt refinancing obligations on its $19,181M debt stack.5
Our rating is Hold. For an ordinary investor, a Hold rating means the shares are reasonably valued relative to baseline cash generation, offering limited near-term capital appreciation that does not sufficiently offset balance sheet debt risks to justify opening or expanding an equity position.
The report was prepared at a price of $176.80 as of October 2, 2026. This price sits at a 9.14% discount to our Fair value of $194.59, representing an implied return of 10.06%. If procedural volume growth accelerates and manufacturing efficiencies improve beyond historical averages, the upper end of our valuation range indicates a of $323.86.
The main risk that would change our view is the company's heavy balance sheet leverage, with $19,181M in total debt against $641M in cash. Facing $2,228M in debt maturities over the next 12 months in an elevated rate environment, refinancing at higher interest rates would expand annual interest charges, depressing net income ($1,678M in FY2025) and cutting into cash generation. Investors would see this risk unfolding if annual net debt reduction falls below $1.0B or if operating cash flow drops below $3.0B.5,6
The main reason the business can succeed is Becton Dickinson's deeply entrenched position in core hospital consumables, led by the Medical segment which generated $11,456M in FY2025 revenue and $4,140M in operating income. Clinical workflows and high switching costs ensure continuous product replenishment, while the company wins market share when competitors face manufacturing disruptions. This volume generates dependable free cash flow of $2,671M, allowing steady debt reduction that increases the equity value per share over time.3,4,7
Essential Consumable Franchises and Deep Clinical Integration
The Medical segment generates 52.45% of total revenue ($11,456M in FY2025) and $4,140M in operating income, anchored by high switching costs in medication delivery and vascular access where BD capitalizes on competitor supply disruptions.3,7
With 41.43% ($9,049M) of FY2025 revenue generated outside the United States, including $4,729M across EMEA and $3,093M across Asia, international procedure expansion insulates the business from domestic reimbursement changes.7
BDX generated $3,430M in operating cash flow and $2,671M in free cash flow in FY2025, providing consistent cash generation to fund dividend commitments and steadily deleverage the balance sheet.4,5
Recomendación de la casa
Hold: BDX provides stable hospital consumable cash flows, but an implied return of 10.06% to our Fair value of $194.59 offers insufficient compensation for the refinancing burden of its $19,181M debt stack.5
Descripción general de la empresa
BD Interventional provides vascular, urology, oncology and surgical specialty products that are intended to be used once and then discarded or are either temporarily or permanently implanted. The primary customers served by BD Interventional are hospitals, ambulatory surgery centers, individual healthcare professionals, extended care facilities, alternate site facilities, and patients via its Homecare business. BD Interventional consists of the following organizational units: Interventional provides vascular, urology, oncology and surgical specialty products that are intended to be used once and then discarded or are either temporarily or permanently implanted. The primary customers served by Interventional are hospitals, ambulatory surgery centers, individual healthcare professionals, extended care facilities, alternate site facilities, and patients via the segment's Homecare business.
Interventional consists of the following organizational units: Surgery, Peripheral Intervention, and Urology and Critical Care.
§2 Caso bajistaEN
Under an integrated stress scenario, operating margin compresses from 11.81% in FY2025 to below 10.0%, while Medical segment consumable volume growth flattens as competitors restore manufacturing operations. Concurrently, refinancing $19,181M in total debt against $641M in cash at pre-tax debt costs exceeding 6.43% expands interest expense above historical levels of $613M, compressing annual free cash flow significantly below normalized levels of $2,671M and constraining capital allocation flexibility.
Elevated interest rate burden and multiple derating on debt refinancing
The Bear scenario models intensified pricing pressure from hospital group purchasing organizations and centralized international procurement programs, combined with the reversal of temporary share gains as competitor manufacturing normalizes. Higher refinancing costs on the debt stack compress net earnings and constrain free cash flow, restricting capital return and driving multiple contraction. Confirmation of this downside trajectory would be marked by operating margin deterioration and stagnant top-line volume growth over the next twelve to eighteen months.
Reported FY2025 operating margin was 11.81% ($2,579M operating income on $21,840M revenue,). If aggressive GPO contract renegotiations in the US and tariff headwinds compress consolidated operating margins by 300 bps below modeled 13.5% targets to under 10.5%, annual operating profit falls by ~$650M.3,6
FV impact
Señales de alerta temprana a vigilar
Los cinco acontecimientos que debilitarían nuestra tesis de inversión.
Consolidated operating margin compressing below 10.5% indicates severe GPO pricing concessions and raw material or tariff inflation that overwhelm operational productivity gains.
Actual:11.81% in FY2025
Alerta si< 10.5%
02
§3 Foso competitivoEN
Narrow
Becton Dickinson and Company (BD) commands a defensible economic moat rooted in the indispensable role its consumable products play across institutional clinical workflows. The company's core Medical segment, which generated $11,456M in FY2025 revenue (52.45% of total revenue) and $4,140M in operating income, provides standard-of-care vascular access, medication delivery, and sharps systems that are deeply integrated into daily nursing practices. The institutional costs of retraining healthcare personnel, altering automated dispensing interfaces, and revalidating safety protocols create high customer switching barriers that insulate baseline unit volumes from competitive encroachment.
Complementing its clinical switching costs, BD possesses substantial scale efficiencies in high-speed, automated consumable manufacturing. Producing billions of precision units annually confers a unit-cost advantage that few specialized competitors can replicate, while allowing BD to ensure supply continuity when competitors suffer manufacturing or regulatory setbacks. Furthermore, BD's global commercial infrastructure distributes products into more than 190 countries, with non-US markets generating $9,049M in FY2025 revenue, led by EMEA ($4,729M) and Asia ($3,093M). This entrenched geographic reach establishes significant distribution barriers to entry.
Despite these structural advantages, BD is assigned a Narrow moat rating due to its historical return profile. Consolidated ROIC was 5.88% in FY2025, lagging the computed WACC of 6.8103%. This spread shortfall stems directly from an expanded invested capital base carrying $26,612M in accumulated goodwill and acquisition intangibles rather than operating cash flow deterioration. Operating income grew to $2,579M in FY2025 and free cash flow reached $2,671M, confirming that underlying cash earnings power remains healthy. Under house methodology, the capital-intensity and goodwill burden bounds the competitive horizon to a 7-year Stage II fade with a stable durability outlook.
Beneficio económico
Reported FY2025 ROIC of 5.88% trails the computed cost of capital (WACC of 6.8103%), resulting in a negative economic spread of -0.93%. This spread deficit reflects an expanded invested capital base burdened by historical acquisition goodwill ($26,612M) rather than structural operating weakness. Core operations generate strong cash flow, with FY2025 operating income of $2,579M on $21,840M revenue (11.81% operating margin) and free cash flow of $2,671M, confirming healthy cash returns on tangible operating capital.2,4
7.2/ 10
Narrow
Sources of advantage
01Switching Costs — Clinical workflow entrenchment, nurse protocol familiarity, and integrated vascular access platforms across hospital systems create steep switching costs for BD's Medical segment, which generated $11,456M in FY2025 revenue and $4,140M in operating profit.Wide
02Cost Advantage and Manufacturing Scale — Massive automated manufacturing scale across high-volume consumable product lines allows BD to sustain supply continuity and capitalize on competitor dislocations, generating operating cash flow of $3,430M in FY2025.Moderate
03
Amenazas conocidas al foso
Amenaza
Severidad
Cronograma
Mitigación
Aggressive Hospital Group Purchasing Organization (GPO) Pricing Renegotiations
medium
12 to 24 months
Execution of the BD Excellence operational productivity initiative to reduce unit production costs alongside bundling comprehensive product portfolios across medication management and diagnostic consumables.3
The highlighted cell is Fair value when every assumption sits at its base level ($194.59). Each row and column shows what Fair value becomes when one assumption moves.
Free cash flow to the firm stays positive in the first projected year at $1.7B after modeled reinvestment of $419.4M, with terminal value at 81.7% of enterprise value. A sudden drop in free cash flow is not projected unless capital spending relative to revenue, reinvestment, or gross margin resets materially.
Consistent international revenue expansion across Europe and Asia
Free cash flow prioritized for scheduled debt deleveraging and dividend distributions
The Base scenario envisions steady hospital procedure replenishment supporting core Medical and Interventional consumable franchises. Operational execution through productivity programs counterbalances selective group purchasing pricing concessions, while international markets compound at moderate single-digit rates. With the shares trading at $176.80 against our Fair value of $194.59, this outcome carries a target of $194.59 at an assigned probability of 55.0%, implying an expected return of 10.1%. Disconfirmation would emerge if core consumable volume growth turns negative or if operating margins slip below targeted levels within the next fiscal year.
Upgrade the rating; Re-examine operating cash flow conversion, verify whether share gains in medication delivery are translating into multi-year hospital contracts, and evaluate whether debt reduction pace warrants expanding allocation.
A significant operational beat driven by core consumable replenishment and productivity execution would indicate that market share gains are structural, expanding free cash flow and justifying an upgraded rating.
En línea
Maintain Hold; Maintain position weighting, monitor quarterly debt paydown milestones, and review inventory turnover across hospital distribution channels.
Disparador: Consolidated revenue and adjusted operating margin aligning with company guidance, with Medical segment replenishment matching baseline procedure trends and scheduled debt service continuing.
Results in line with expectations support the mature dividend thesis, showing stable replacement volumes and disciplined operational cost containment without presenting a catalyst for rating revision.
Fallo
Downgrade the rating; Review exposure to hospital consumable suppliers, verify whether pricing weakness is concentrated in specific product lines or geographies, and assess whether debt service constraints threaten capital return.
Disparador: Consolidated revenue falling short of expectations due to Medical volume softness, operating margin contracting on hospital procurement concessions, or free cash flow insufficient to meet scheduled debt paydown.
A material miss driven by pricing concessions or volume losses would indicate that competitor supply recoveries and procurement resistance are impairing baseline cash generation against the large fixed debt stack.
Calidad de los beneficios
Earnings quality is supported by robust cash conversion, with free cash flow substantially exceeding reported net income due to the non-cash amortization of acquisition-related intangible assets. Working capital requirements remain disciplined, though inventory levels in hospital supply channels warrant close monitoring following recent supply chain adjustments. Operating margins reflect solid gross profitability offset by heavy amortization and steady research reinvestment, confirming that underlying core consumable operations generate clean operational cash.
Métricas a vigilar antes de la publicación
01
Métrica:
Medical Segment Organic Growth and Volume Retention
ActualTracking steady hospital replenishment and procedural demand across medication delivery and vascular access platforms.
Por qué importa
Medical segment consumable pull-through reveals whether market share captured during peer supply dislocations is converting into durable institutional hospital relationships, directly driving top-line revenue and operating cash flow.
BD demonstrates exceptional cash flow conversion, generating $3,430M in operating cash flow in FY2025. Deducting disciplined capital expenditures of $760M resulted in free cash flow of $2,671M, translating into a 159.2% free cash flow conversion of GAAP net income ($1,678M). This high conversion reflects substantial non-cash depreciation and amortization ($2,462M in FY2025) associated with past acquisitions relative to modest maintenance capital expenditure requirements (3.48% of revenue).4,5,6
The accounting ROIC deficit is an artifact of $26,612M in accumulated goodwill and acquisition intangibles that inflate the denominator rather than an indicator of structural cash flow inadequacy. Core tangible operations deliver strong economic profitability, with operating profit of $2,579M and free cash flow of $2,671M in FY2025. ROIC is projected to stabilize and gradually improve as debt is paid down and invested capital normalizes.
Trailing ROIC of 5.88% compares unfavorably to the computed WACC of 6.8103%, producing an economic profit deficit of -0.93%.
Ingresos más recientes21,8 mil M US$CAGR de ingresos +7,7 %
Margen operativo11,8 %9 periodos fiscales
Flujo de caja libre más reciente2671 M US$FY2025
Deuda neta18,5 mil M US$FY2025
Desglose de la cuenta de resultadosCómo la escala del negocio se convierte en beneficio declarado.
StockMarketAgent.AI
Ingresos21,8 mil M US$Coste de ventas−11,9 mil M US$Beneficio bruto9924 M US$Gastos operativos−7345 M US$Beneficio operativo2579 M US$Partidas no operativas e impuestos−901 M US$Beneficio neto1678 M US$
Datos del historial financiero
Ingresos
21.840.000.000 US$
Coste de ventas
11.916.000.000 US$
Beneficio bruto
9.924.000.000 US$
Gastos operativos
7.345.000.000 US$
Beneficio operativo
2.579.000.000 US$
Partidas no operativas e impuestos
-901.000.000 US$
Beneficio neto
1.678.000.000 US$
Resumen del balanceCómo se mantienen y financian los activos declarados en el período seleccionado.
StockMarketAgent.AI
Composición de activosFinanciado por
Activos totales55,3 mil M US$Efectivo641 M US$Activos corrientes9255 M US$Pasivos totales29,9 mil M US$Pasivos corrientes8313 M US$Patrimonio neto25,4 mil M US$
Datos del desglose del balance
Activos totales
55.325.000.000 US$
Efectivo
641.000.000 US$
Activos corrientes
9.255.000.000 US$
Pasivos totales
29.936.000.000 US$
Pasivos corrientes
8.313.000.000 US$
Patrimonio neto
25.390.000.000 US$
Puente de flujo de cajaCómo el flujo de caja operativo se convirtió en flujo de caja libre en FY2025.
StockMarketAgent.AI
Conciliación del flujo operativo
Beneficio neto1678 M US$Depreciación y amortización+2462 M US$Compensación basada en acciones+258 M US$Otros ajustes operativos−968 M US$Flujo de caja operativo3430 M US$
Conciliación del efectivo inicial al final
Efectivo inicial1856 M US$Flujo de caja operativo+3430 M US$Flujo de inversión−818 M US$Flujo de financiación−3617 M US$Efectivo final851 M US$
3430 M US$ − 760 M US$Flujo de caja libre 2670 M US$
Datos del puente de flujo de caja
Beneficio neto
1.678.000.000 US$
Entrada operativa
4.398.000.000 US$
Depreciación y amortización
2.462.000.000 US$
Compensación basada en acciones
258.000.000 US$
Flujo de caja operativo
3.430.000.000 US$
Salida operativa
968.000.000 US$
Efectivo disponible
5.286.000.000 US$
Efectivo inicial
1.856.000.000 US$
Salida de inversión
818.000.000 US$
Capex
760.000.000 US$
Otras actividades de inversión
58.000.000 US$
Salida de financiación
3.617.000.000 US$
Recompras de acciones
1.000.000.000 US$
Dividendos pagados
1.196.000.000 US$
Amortización neta de deuda
1.334.000.000 US$
Otras actividades de financiación
87.000.000 US$
Efectivo final
851.000.000 US$
Flujo de inversión
-818.000.000 US$
Flujo de financiación
-3.617.000.000 US$
Ingresos por segmento operativoProporción de los ingresos totales de 2025-09-30.
21,8 mil M US$Ingresos totales
Ingresos por segmento operativoProporción
Medical11,5 mil M US$52,5 %+13,7 % interanual
Interventional5217 M US$23,9 %+4,8 % interanual
Life Sciences5167 M US$23,7 %−0,5 % interanual
Fuente: SEC EDGAR · Presentado 2025-11-25 · SEC EDGAR
Datos de composición de ingresos: Ingresos por segmento operativo
Ingresos por segmento operativo
Ingresos
Proporción
interanual
Medical
11,5 mil M US$
52,5 %
13,7 %
Interventional
5217 M US$
23,9 %
4,8 %
Life Sciences
5167 M US$
23,7 %
-0,5 %
Ingresos y beneficiosCómo la escala del negocio se convierte en beneficio declarado.
Efectivo y deudaLiquidez disponible frente al endeudamiento total.
Generación de efectivoFlujo de caja operativo frente al flujo de caja libre.
RentabilidadEvolución de los márgenes bruto, operativo y neto.
Datos financieros puntuales utilizados en el análisis del 2026-10-02.
Datos del historial financiero
Período
Ingresos
EBITDA
Beneficio neto
Flujo de caja operativo
Flujo de caja libre
Capex
Depreciación y amortización
Compensación basada en acciones
Recompras de acciones
Dividendos pagados
Emisión neta de deuda
Flujo de inversión
Flujo de financiación
Efectivo inicial
Efectivo final
Efectivo e inversiones
Deuda total
Margen operativo
ROIC
WACC
Diferencial ROIC−WACC
2017-09-30
12,1 mil M US$
2585 M US$
1100 M US$
2550 M US$
1823 M US$
727 M US$
1088 M US$
174 M US$
220 M US$
677 M US$
—
-883 M US$
11 mil M US$
1541 M US$
14,2 mil M US$
14,2 mil M US$
18,9 mil M US$
12,6 %
—
5,1 %
—
2018-09-30
16 mil M US$
3857 M US$
311 M US$
2865 M US$
1970 M US$
895 M US$
1978 M US$
322 M US$
0 US$
927 M US$
—
-15,7 mil M US$
-58 M US$
14,2 mil M US$
1236 M US$
1157 M US$
21,5 mil M US$
9,4 %
—
5,1 %
—
2019-09-30
17,3 mil M US$
4068 M US$
1233 M US$
3330 M US$
2373 M US$
957 M US$
2253 M US$
261 M US$
0 US$
984 M US$
—
-741 M US$
-3223 M US$
1236 M US$
590 M US$
566 M US$
19,4 mil M US$
10,2 %
—
4,9 %
—
2020-09-30
16,1 mil M US$
3057 M US$
874 M US$
3539 M US$
2770 M US$
769 M US$
2115 M US$
236 M US$
0 US$
1026 M US$
—
-1232 M US$
22 M US$
590 M US$
2917 M US$
2845 M US$
17,9 mil M US$
5,7 %
—
4,1 %
—
2021-09-30
19,1 mil M US$
4391 M US$
2092 M US$
4647 M US$
3453 M US$
1194 M US$
2230 M US$
229 M US$
1750 M US$
1048 M US$
—
-1880 M US$
-3306 M US$
2917 M US$
2392 M US$
2295 M US$
18,4 mil M US$
11,8 %
—
4,0 %
—
2022-09-30
18,9 mil M US$
4410 M US$
1779 M US$
2633 M US$
1660 M US$
973 M US$
2229 M US$
233 M US$
500 M US$
1082 M US$
-78 M US$
-3220 M US$
-591 M US$
2392 M US$
1159 M US$
1014 M US$
17 mil M US$
12,1 %
—
6,0 %
—
2023-09-30
19,4 mil M US$
4402 M US$
1484 M US$
2989 M US$
2115 M US$
874 M US$
2288 M US$
259 M US$
0 US$
1114 M US$
-723 M US$
-716 M US$
-1956 M US$
1159 M US$
1481 M US$
1424 M US$
16,8 mil M US$
10,9 %
—
6,9 %
—
2024-09-30
20,2 mil M US$
4819 M US$
1705 M US$
3798 M US$
3072 M US$
725 M US$
2286 M US$
247 M US$
500 M US$
1100 M US$
3775 M US$
-5514 M US$
2087 M US$
1481 M US$
1856 M US$
2162 M US$
21,6 mil M US$
11,9 %
—
5,6 %
—
2025-09-30
21,8 mil M US$
4957 M US$
1678 M US$
3430 M US$
2671 M US$
760 M US$
2462 M US$
258 M US$
1000 M US$
1196 M US$
-1334 M US$
-818 M US$
-3617 M US$
1856 M US$
851 M US$
649 M US$
19,2 mil M US$
11,8 %
—
5,6 %
—
§9 Comparación de valoración con pares
Valor razonableReport-date price
Becton Dickinson and CompanyBDX
Precio / valor razonable
Valor razonable194,59 US$Report-date price176,8 US$
Fecha de evaluación
Ventaja competitivaNarrow
Cuadro de mando de inversión56 / 100
ResMed Inc.RMD
Precio / valor razonable
Valor razonable239,41 US$Report-date price218,89 US$
Fecha de evaluación
Ventaja competitivaWide
Cuadro de mando de inversión76 / 100
Solventum CorporationSOLV
Precio / valor razonable
Valor razonable103,66 US$Report-date price86,57 US$
Fecha de evaluación
Ventaja competitivaNarrow
Cuadro de mando de inversión57 / 100
Becton Dickinson and CompanyBDX
Precio / valor razonable
Valor razonable194,59 US$Report-date price176,8 US$
Becton Dickinson and Company (BDX) trades at 13.7x forward earnings against a peer median of 17.9x. Its EV/EBITDA of 10.6x compares with a peer median of 16.2x. The comparison uses 4 peers: ResMed Inc., Solventum Corporation, Quest Diagnostics Incorporated and West Pharmaceutical Services Inc., as of 2026-10-02.
§10 Industria y cicloEN
Fase del ciclo
Contraction
The healthcare products industry exhibits restrained capital reinvestment, with an industry capex-to-depreciation ratio of 0.80 and capex-to-revenue of 4.5%. BD's capital expenditures of $760M in FY2025 represented 3.48% of its $21,840M revenue,, reflecting disciplined asset maintenance below accounting depreciation.6
Ciclo alcista
An industry upcycle driven by expanding global inpatient surgical volumes, increased hospital automation adoption, and accelerating demand across European ($4,729M) and Asian healthcare markets ($3,093M), lifting operating margin closer to the industry benchmark of 15.5%.
Ciclo bajista
An industry downcycle marked by hospital capital spending freezes, aggressive group purchasing consortium price reductions, and government volume-based procurement mandates that compress gross margins and delay elective procedural replenishment.
Tendencias seculares
Tendencia
Impacto
Nota
Global Demographic Aging and Rising Inpatient Acuity
positive
Aging populations across mature and emerging markets expand surgical and inpatient hospital admissions, driving non-cyclical replenishment demand for baseline medical injection, infusion, and diagnostic testing consumables.
Centralized Hospital Procurement and Government Tender Deflation
negative
Public healthcare systems in international jurisdictions (generating $9,049M in non-US revenue in FY2025) increasingly implement volume-based procurement policies that mandate unit price concessions on mature consumable categories.
Posicionamiento
BD commands an entrenched position as a primary supplier of foundational hospital infrastructure, generating 52.45% of consolidated revenue from its Medical segment ($11,456M), supported by Interventional ($5,217M) and Life Sciences ($5,167M). This broad portfolio footprint enables bundled institutional contracting that insulates BD against niche competitors.7
§11 Gestión de posiciónEN
Tamaño de posición
2-3%
Position sizing reflects a mature dividend payer with stable core cash flows offset by an elevated debt burden of $19,181M, warranting an unaggressive allocation consistent with a Hold recommendation.5
Riesgo
Manage position risk through strict adherence to debt paydown checkpoints and margin preservation. Given the company's financial leverage ($19,181M total debt), position sizing should remain capped at moderate allocation levels, with risk controls triggered if operating margin drops below 10.5% or annual net debt reduction falls short of $1.0B.
Tramos de entrada
Nivel
Acción
Por qué
$155.00 - $160.00
Consider initial position initiation
Provides an adequate margin of safety against balance sheet debt refinancing risks and hospital pricing pressures, representing an approximate 18-20% discount to fair value of $194.59.
$140.00 - $145.00
Consider secondary tranche accumulation
Reflects deep discount where dividend yield exceeds historical averages and downside risks are heavily priced in.
Tramos de salida
Nivel
Acción
$195.00
Trim position toward benchmark weight as shares reach fair value.
$225.00
Substantially reduce exposure as shares approach the upper boundary of the valuation range.
Existing shareholders can maintain holdings for reliable dividend distributions supported by $2,671M in FY2025 free cash flow, although dividend growth will remain modest while management directs capital toward reducing $19,181M in debt.4,5
Value and Total Return Investors
Hold
A 10.06% implied return from the report-date price of $176.80 to Fair value of $194.59 does not provide a sufficient margin of safety to justify initiating new positions.
Growth and Momentum Investors
Avoid
Revenue visibility is constrained by consensus FY2027 forecasts of $19,732.9M reflecting an organic reset from FY2025 levels of $21,840M, alongside persistent Alaris roll-off drag.1,3,6
§14 Recomendación finalEN
Acción
Mantener
We recommend a Hold on BDX. The company benefits from deeply entrenched clinical franchises across hospital networks, producing $3,430M in operating cash flow. However, the report-date price of $176.80 offers only a 10.06% implied return to Fair value of $194.59, which provides an inadequate margin of safety against the company's $19,181M debt stack.5
Investors should hold current allocations to collect dividends while deferring new capital commitments until management demonstrates accelerated net debt paydown of at least $1.0B annually or a wider valuation discount presents itself.
§15Your notes
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Sources
The records this analysis drew on, as they stood when it was run.
Not every cited input appears here: internal calculations and intermediate model outputs have no external record, and some citations could not be matched to one.
Competitor Supply Dislocation Reversal and Consumable Volume Stagnation
Consensus FY2027 revenue is estimated at $19,732.9M, reflecting a -9.65% decline from FY2025 reported revenue of $21,840M. If temporary share gains from competitor outages reverse while Alaris headwinds persist, top-line growth stalls across the 5-year forecast horizon.1,3,6
FV impact
-2.6%
Revenue and EPS growth 5 points lower for five years
Total debt of $19,181M against cash of $641M forces large refinancings at pre-tax debt costs above 6.43%. As interest burden expands and dividend payout remains high (0.7249), equity valuation derates by 20% from the modeled 15.0x terminal P/E to below 12.0x, aligning near SOLV's 12.15x multiple.2,5,6
Flat or negative revenue growth in the core Medical segment confirms that market share gains from competitor supply disruptions have reversed and hospital utilization is stagnating.
Contraction exceeding 2.0% in non-US revenue reveals severe tender pricing deflation or volume-based procurement concessions across European and Asian hospital markets.
Global Distribution Network and Regulatory Intangibles
— Established multinational distribution infrastructure and complex regulatory clearances supported $9,049M in non-US revenue (41.43% of total revenue) in FY2025, spanning EMEA ($4,729M) and Asia ($3,093M).
Moderate
International Centralized Procurement and Volume-Based Tender Deflation
medium
12 to 36 months
Expanding clinical differentiation toward advanced safety devices, closed-system drug transfer devices, and automated diagnostic workflows that defend premium pricing.
Competitor Capacity Re-entry Following Prior Supply Chain Outages
medium
18 to 24 months
Securing long-term multi-year replenishment contracts with health systems capitalizing on demonstrated fulfillment reliability.3
Multiply the peer median PEG by this stock's forecast growth to derive an implied forward P/E, then apply it to forward EPS.
How this lens was calculated
Inputs used in this report
Re-rating of equity multiple closer to diversified healthcare peer medians
The Bull scenario reflects sustained market share capture from competitor supply disruptions, accelerating Medical segment volume growth alongside expanding international adoption. Manufacturing automation and operating leverage widen operating margins toward peer benchmark levels, driving accelerated free cash flow that substantially expedites debt retirement. This upside path yields a target of $323.86 with an assigned probability of 20.0%, representing a return of 83.2% toward Potential value of $323.86. Disconfirmation would occur if competitor capacity quickly restores customer volume share or if hospital capital spending slows within the next two fiscal years.
ActualManagement continues to implement operational productivity initiatives to counter tariff and raw material pressures.
Por qué importa
Operating margin expansion reflects manufacturing automation efficiencies and procurement savings, offsetting input cost inflation and hospital purchasing pressure to lift consolidated earnings per share.
03
Métrica:
Free Cash Flow Conversion and Balance Sheet Deleveraging
ActualCash flow generation remains dedicated primarily to scheduled debt repayment and dividend maintenance.
Por qué importa
Robust free cash flow conversion provides the essential capital required to retire debt maturities, lowering future interest expense burden and protecting dividend distributions.
04
Métrica:
International Tender Pricing and Geographic Expansion
ActualInternational operations across Europe and Asia continue expanding procedural footprint amid ongoing regional public tender reviews.
Por qué importa
Pricing dynamics across European tenders and Asian volume-based procurement determine whether international revenue diversification generates expanding or dilutive operating profit.
05
Métrica:
Infusion Platform Headwinds and Replacement Cycle
ActualPlatform headwinds are being absorbed across consecutive quarters through core consumable expansion.
Por qué importa
Tracking the absorption of infusion system roll-off headwinds clarifies when organic growth drag dissipates, removing an overhang on top-line compounding.
Capital allocation is centered on balance sheet deleveraging and steady shareholder dividend returns. With total debt of $19,181M and cash of $641M ($18,532M net debt) against capital expenditures of $760M in FY2025, management directs the bulk of free cash flow ($2,671M) toward debt principal amortization and maintaining its mature dividend distribution ($4.20 per share approved dividend assumption), leaving share buybacks and large acquisitions constrained until debt leverage falls toward target levels.
Reported GAAP earnings understate BD's true cash-generative power, providing robust coverage for dividend commitments and scheduled debt reduction.
Heavy Balance Sheet Leverage Imposes Refinancing Discipline
Total debt stood at $19,181M at the end of FY2025 against $641M in cash, with pre-tax cost of debt estimated at 6.43% and a 5.26% 10-year risk-free rate.
Debt refinancing in a higher-rate environment creates interest expense friction, requiring sustained annual free cash flow allocation to debt paydown rather than discretionary equity repurchases.
Medical Segment Contributes Over Half of Enterprise Profitability
The Medical segment produced $4,140M in operating income on $11,456M revenue in FY2025,, representing 52.45% of total revenue ($21,840M).
Enterprise performance is fundamentally tethered to hospital consumable utilization; defending market share and pricing in this segment is paramount to sustaining consolidated margins.
Quest Diagnostics IncorporatedDGX
Precio / valor razonable
Valor razonable226,02 US$Report-date price190,18 US$
Fecha de evaluación
Ventaja competitivaNarrow
Cuadro de mando de inversión64 / 100
West Pharmaceutical Services, Inc.WST
Precio / valor razonable
Valor razonable191,6 US$Report-date price359,51 US$
Fecha de evaluación
Ventaja competitivaWide
Cuadro de mando de inversión71 / 100
Margen
BDX
Becton Dickinson and Company
$48.2B
13.7x
2.1x
10.6x
6.6%
—
RMD
ResMed Inc.
$31.6B
16.5x
5.6x
14.9x
24.3%
30.9%
SOLV
Solventum Corporation
$15.0B
12.2x
1.8x
17.4x
34.0%
9.8%
DGX
Quest Diagnostics Incorporated
$25.8B
19.4x
2.2x
14.0x
14.6%
15.2%
WST
West Pharmaceutical Services Inc.
$25.7B
36.6x
7.7x
28.0x
19.1%
22.5%
Hospital Workflow Automation and Safety Regulation
positive
Stricter clinical safety regulations and nursing labor shortages drive hospital adoption of safety-engineered sharps, closed-system drug transfer devices, and automated diagnostic workflows, raising technical switching barriers for healthcare providers.
Downgrade rating to Reduce and reduce position weight to reflect structural margin compression.
