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Taking Stock of Becton Dickinson’s Risk Factors
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Taking Stock of Becton Dickinson’s Risk Factors

Medical technology company Becton Dickinson & Co. (BDX) recently delivered a better-than-expected performance for the fourth quarter on both its top-line and bottom-line. During this period, BDX witnessed growth across the BD Medical, BD Life Sciences, and BD Interventional segments.

Moreover, BDX is targeting 5.5%+ revenue growth and double-digit earnings per share (EPS) growth over the long term.  As part of its BD 2025 strategy, BDX is focusing on growth through innovation, expanding margins, and balanced deployment of capital. The company is also focused on geographic expansion and tuck-in M&A.

With these developments in mind, let us take a look at the changes in BDX’s key risk factors that investors should know.

Risk Factors

According to the TipRanks Risk Factors tool, BDX’s top two risk categories are Macro & Political and Production, contributing 27% and 23% to the total 22 risks identified, respectively. In its recent annual report, the company has added one key risk factor under the Macro & Political risk category.

BDX highlighted that its business and operations face risks stemming from climate change. Events such as extreme weather or other conditions that are a result of climate change could impact BDX’s supply chain, the availability and cost of raw materials, as well as the required components.

Such events could also result in physical damage to the company’s products, plants, and distribution centers. Additionally, regulations aimed at limiting greenhouse gas emissions and mitigating the impact of climate change could lead to higher costs for BDX coupled with costs charged by its suppliers.

Furthermore, BDX also changed two risk factors. Under the Finance & Corporate risk category, BDX noted that its ability to operate its businesses may be affected due to the restrictions imposed by the agreements that govern its indebtedness. (See Insiders’ Hot Stocks on TipRanks)

Under the Macro & Political risk category, BDX conceded that the COVID-19 pandemic has had a material adverse impact on its business, which could continue into the future. Additionally, the nature and extent of future impacts remain highly uncertain and unpredictable.

Compared to a sector average of 5%, BDX’s Macro & Political risk factor is at 27%.

Wall Street’s Take

Consensus on the Street is a Moderate Buy based on 1 Buy and 2 Holds. The average Becton Dickinson price target of $266.67 implies a potential upside of 9.47% for the stock. Shares have remained relatively flat so far this year, with a decline of 2.8%.

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