BECTON DICKINSON & CO (BDX): what the price assumes

In the published model solve dated 2026-Q2, anchored at $189.52, BECTON DICKINSON & CO (BDX) is priced for +10.7% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-25.

Generated: 2026-08-30 · Exported: 2026-08-31 · Source: https://boothcheck.com/report/BDX

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 7.1% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

Every valuation family lands below the price. The price therefore sits beyond what those standard frames encode.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that call it expensive: Asset, Earnings, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.1%); the inversion above states its own rate.

Per-Model Detail (n=9)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• On 9 February 2026 BD spun its Biosciences and Diagnostic Solutions business into Waters Corporation, taking 4 billion dollars of cash and handing its own holders stock representing 39.2% of the combined company, which leaves behind a narrower business built on medication delivery, medication management and prefillable drug-delivery systems.
• The pressure point is coverage rather than growth: trailing operating profit covers interest a little over three times, and the FY2025 10-K observes that third-party payers are increasingly challenging the reimbursement models and prices charged for medical products and services.
• Third-quarter fiscal 2026 results, covering the quarter that ended 30 June 2026, are due on 6 August 2026, and they will be the second full quarter reported without the divested business.

Bull Case

Watch where the money went, because it is the clearest statement management has made. The separation put 4 billion dollars of cash on the balance sheet, and in the March 2026 quarter BD spent it in two directions at once: an accelerated repurchase of $2.0 billion of its own stock, and the retirement of 2.1 billion dollars of borrowings. Roughly half to owners, roughly half to lenders, none of it to a large new acquisition. A company that believes its remaining business is undervalued buys the stock. A company that thinks its balance sheet is a constraint pays down what it owes. BD did both, which reads as a management team more interested in cleaning up than in building out.

What remains is more focused than the old conglomerate. Medication Delivery Solutions is the largest piece at 21% of revenue, Medication Management Solutions is 16%, and Pharmaceutical Systems is 11%. That last one is quietly the most interesting. The FY2025 10-K reports double-digit growth in sales of the Pharmaceutical Systems unit's prefillable solutions in the biologic drug category, which is the business of supplying the syringes and containment systems that injectable biologic drugs are shipped in. When a pharmaceutical company launches an injectable, someone has to make the glass or polymer barrel it comes in, and the qualification process for that container is written into the drug's own regulatory filing. Switching suppliers means touching the drug approval. That is a moat made of paperwork, and it is the most durable kind in this industry.

The operating picture is steadier than the reported profit suggests. Revenue in the March 2026 quarter reached $4.7 billion, up 5.2% as reported and 2.6% on a currency-neutral basis, with more than 90% of the business growing at a mid-single-digit rate. Averaged across five years and with one-time charges added back, operating profit runs meaningfully above the trailing twelve-month figure, which is what you would expect from a company that has spent recent years absorbing separation costs and acquisition amortisation.

Against the medical-device cohort, BD's reported profitability is not the outlier the headline suggests. On a trailing basis BD runs a 9.6% operating margin. BAX carries a negative 2.6% operating margin on $11.32 billion of revenue. ICUI runs 2.0% and TFX runs 3.0%. MMSI, one of the better performers in the group, runs 12.2% on $1.54 billion of revenue. The whole cohort is carrying heavy amortisation and restructuring, and BD sits in the upper half of it rather than the bottom.

The last structural piece is simplification. Effective 1 October 2025 the company reorganised into five distinct, separately-managed segments, replacing a unit structure that had grown to more than a dozen pieces. Simpler reporting is not a strategy on its own. It is, however, the precondition for the kind of margin recovery the price is asking for, because you cannot fix what you cannot separately measure.

Bear Case

Read a competitor's filing and the erosion is written down for you. Merit Medical's 10-K names its primary competitors in cardiac intervention as Teleflex, Cook Medical, Medtronic, Boston Scientific and Becton, Dickinson and Company, and describes the marketplace as characterized by rapid technological advancement, industry and customer consolidation, customer demands for price reductions, regulatory reform. Customer demands for price reductions is the phrase to sit with. BD's own 10-K puts the other half of it plainly, warning that even successfully developed new products or enhancements may be quickly rendered obsolete by changing customer preferences, changing industry or regulatory standards, or competitors' innovations. Hospital purchasing has consolidated faster than device innovation has differentiated, and the incumbent with the broadest catalogue is the one with the most items on the price-reduction list.

The data shows where that lands. On a trailing basis BD earns a 9.6% operating margin and a 4.7% return on shareholder equity, and reported GAAP diluted earnings from continuing operations in the March 2026 quarter came in at negative $0.13. Strip out currency from the same quarter and revenue grew 2.6% rather than the 5.2% headline. A business whose real growth is running in the low single digits and whose reported returns sit below its cost of equity is not obviously a compounder.

Now hold that against what today's price asks. At $156.38 the market is paying roughly 32 times the operating profit the company currently earns, which resolves into operating profit growing about 12% a year for five years. Set 12% against 2.6% currency-neutral revenue growth and you can see the shape of the requirement: essentially all of it has to come from margin recovery rather than from selling more. That is a specific bet on separation costs falling away and amortisation rolling off, on a schedule nobody has committed to publicly.

The method disagreement makes the same point from a different angle. Peer multiples are the only lens that comes near today's price. The asset-value methods, the earnings-power methods and the cash-flow methods all land far beneath it. And the peer-multiple lens is exactly where the caution belongs, because on that comparison the multiple sits at the very top of the peer distribution, well beyond the upper quartile. The single approach that supports the price supports it by comparing BD to a group BD sits at the extreme end of. That is not a wide safety margin.

Debt is the amplifier under all of it. Even after retiring 2.1 billion dollars of borrowings in the March quarter, trailing operating profit covers interest expense a little over three times. Coverage at that level is manageable while profit is flat and uncomfortable if profit falls. The dividend, the buyback and the deleveraging all draw on the same cash, and in a year where growth disappoints, one of the three gives way. It is rarely the dividend, which means it is usually the buyback, which is the one supporting the share count.

Valuation

Today's price sets a specific and demanding task. At $156.38 the market pays roughly 32 times the operating profit BD currently earns, and that multiple resolves into operating profit compounding at about 12% a year for the next five years. Hold that figure loosely: the arithmetic is unusually sensitive here, with each percentage point of change in the assumed cost of capital moving the required growth rate by roughly 9.5 points. The direction is the durable part. The precise number is not.

Where that requirement gets uncomfortable is the comparison set. Against BD's own recent record the near-term pace is within reach, and historically about 54% of comparable fast growers kept a pace like that going for five years. Against the sector, though, the multiple sits at the very top of the peer distribution, well beyond the upper quartile. Investors are paying a full price for a recovery rather than a discount for a turnaround.

The methods split about as cleanly as they can. Peer-multiple approaches come closest, and even they put the price about 16% above where that family lands. The asset-value lenses, the earnings-power lenses and the cash-flow lenses all sit far below. When only the relative comparison reaches the price, the price is being defended by what other companies trade at rather than by what this one produces, and that is a defence that moves when sentiment toward the whole sector moves.

Two things about the composition matter for reading those figures. The trailing profit the multiple is built on still carries the Biosciences and Diagnostic Solutions business that left the company on 9 February 2026, so the earnings base and today's price are not describing quite the same enterprise. And what remains is weighted toward Medication Delivery Solutions at 21% of revenue, Medication Management Solutions at 16% and Pharmaceutical Systems at 11%, businesses with different growth profiles and different competitive intensity. A single company-wide margin target flattens that, which is one more reason to treat the implied figure as a direction rather than a forecast.

On the balance sheet the honest headline is coverage. Trailing operating profit covers interest expense a little over three times, after the company retired 2.1 billion dollars of borrowings and executed a $2.0 billion accelerated share repurchase in the March 2026 quarter using proceeds from the separation. Share count has drifted down about 0.6% a year over the four years to March 2026, which is a slow grind rather than a serious retirement of stock. The business generates cash rather than consuming it, so the downside here is not solvency. It is a multiple built on peer comparison, resting on earnings that have to recover on schedule for the comparison to keep making sense.

Catalysts

The next dated event is the fiscal third quarter. BD reports results for the quarter ended 30 June 2026 on 6 August 2026, with a webcast the same morning. It will be the second full period reported without Biosciences and Diagnostic Solutions, which makes it the first clean look at what the remaining company actually grows at.

The baseline it is measured against is the March 2026 quarter, reported on 7 May 2026: revenue of $4.7 billion, up 5.2% as reported and 2.6% currency-neutral, with more than 90% of the business delivering mid-single-digit growth, and GAAP diluted earnings from continuing operations of negative $0.13. The same quarter carried the capital deployment: a $2.0 billion accelerated share repurchase and the retirement of 2.1 billion dollars of borrowings. The gap between the 5.2% reported and the 2.6% currency-neutral figure is the one to watch, because a weaker dollar flatters a company with substantial international sales and reverses without warning.

The structural change behind all of it completed on 9 February 2026, when the Biosciences and Diagnostic Solutions business was spun off and merged with Waters Corporation. BD holders received 0.135 Waters shares for each BD share held at the 5 February record date, ending up with stock representing 39.2% of the combined company, and BD itself received 4 billion dollars in cash. Year-on-year comparisons through the rest of fiscal 2026 will therefore compare two different companies, and any figure quoted without specifying continuing operations should be treated with suspicion.

Peer Cohorts (Per Segment, With Filing Citations)

BD Medical (reported)

• BAX (BAXTER INTERNATIONAL INC)
• FY2025 10-K: …bax:HealthcareSystemsAndTechnologiesMember 2025-01-01 2025-12-31 0000010456 us-gaap:OperatingSegmentsMember bax:FrontLineCareMember bax:HealthcareSystemsAndTechnologiesMember 2025-01-01 2025-12-31 0000010456 us-gaap:OperatingSegmentsMember bax:FrontLineCareMember country:US bax:HealthcareSystemsAndTechnologiesMember…
• FY2025 10-K: …us-gaap:NonUsMember bax:HealthcareSystemsAndTechnologiesMember 2023-01-01 2023-12-31 0000010456 us-gaap:OperatingSegmentsMember bax:HealthcareSystemsAndTechnologiesMember 2023-01-01 2023-12-31 0000010456 us-gaap:OperatingSegmentsMember bax:InjectablesAndAnesthesiaMember country:US bax:PharmaceuticalsMember 2025-01-01…
• ICUI (ICU MEDICAL INC/DE)
• FY2025 10-K: …reliability, patent protection, ease of use and the pricing of our products, in addition to the access to distribution channels. We encounter significant competition in this market both from global, large, established medical device manufacturers and from smaller companies. We compete with products and systems…
• FY2025 10-K: ; and Stepstone Group, Inc. since 2020. Mr. Hoffmeister received a bachelor's of science degree from University of Minnesota and a M.B.A. from University of Chicago. The Board believes Mr. Hoffmeister should serve as a director due to his strong finance background and extensive experience as a chief financial officer…
• TFX (TELEFLEX INCORPORATED)
• FY2025 10-K: …is permitted. We are currently evaluating this guidance to determine its impact on our consolidated financial statements. In September 2025, the FASB issued new guidance designed to clarify and modernize the accounting for costs related to internal-use software. The updated guidance is intended to provide enhanced…
• FY2025 10-K: , by and between the Company and Lotus US Bidco Inc. (incorporated by reference to Exhibit 2.1 to the Company's Form 8-K filed on December 9, 2025). #*2.2 - Equity Purchase Agreement, dated December 9, 2025, by and between the Company, Intersurgical Limited, Intersurgical AG, Intersurgical Inc., Engineered Medical…
• MMSI (MERIT MEDICAL SYSTEMS INC)
• FY2025 10-K: …("Teleflex"), Cook Medical Incorporated ("Cook Medical"), Medtronic plc ("Medtronic"), Boston Scientific Corporation ("Boston Scientific"), and Becton, Dickinson and Company ("BD"). Our primary competitors in our cardiac intervention market are BD, Teleflex, Medtronic, Abbott Laboratories, Terumo Corporation, Edwards…
• FY2025 10-K: …of cardiology, radiology, oncology, critical care and endoscopy. This marketplace is characterized by rapid technological advancement, industry and customer consolidation, customer demands for price reductions, regulatory reform, and evolving patient needs. We compete with companies of varying sizes. Many of our…
• EW (EDWARDS LIFESCIENCES CORPORATION)
• FY2025 10-K: 's assembled workforce and expected synergies the Company believes will result from the acquisition. Goodwill was assigned to the Company's United States segment and is not deductible for tax purposes. IPR&D has been capitalized at fair value as an intangible asset with an indefinite life and will be assessed for…
• FY2025 10-K: …operating model agreements to support the commercial operations until there has been a full transfer of all regulatory licenses to BD and completion of services under the TSA agreement, a manufacturing and supply agreement, and a quality agreement. Under these agreements, the Company will continue to provide certain…

BD Life Sciences (reported)

• DGX (QUEST DIAGNOSTICS INC)
• FY2025 10-K: …other diseases, and offer advanced tests in many fields, including endocrinology, immunology, neurology and oncology. Increasingly, we are focused on providing solutions and insights to our customers, based on the testing that we perform, the data that we gather and our extensive medical, information and connectivity…
• FY2025 10-K: …health connectivity systems in Canada. During the full year of 2025, LifeLabs performed approximately 23 million test requisitions to help diagnose, treat, monitor and prevent diseases for millions of Canadians. LifeLabs operates approximately 15 laboratories, over 350 collection centers in British Columbia, Ontario…
• LH (LABCORP HOLDINGS INC.)
• FY2025 10-K: …health systems. The BLS global sales and customer service organizations provide customer coverage primarily to pharmaceutical and biotechnology companies, supporting services that span lead optimization, preclinical safety assessment, analytical services, clinical trial enablement through data insights, central…
• FY2025 10-K: In addition, an increasing number of health system laboratories have expanded their operations and business, resulting in greater competition for testing from physicians within those systems and from unaffiliated physicians in the health system laboratories' service area. Dx believes that the selection of a laboratory…
• QGEN (QIAGEN N.V.)
• FY2025 20-F: …Compensation & Human Resources, Nomination & Governance (1949, U.S./British) Skills and qualifications • Accomplished healthcare and biotech executive with deep industry experience • Strong background in strategy, business development and growth initiatives • Contributes extensive public company board experience and…
• FY2025 20-F: …which rely on government grants, particularly from agencies like the U.S. National Institutes of Health (NIH), the largest source of Life Sciences funding in the country. While research funding has increased in recent years, future levels remain uncertain due to federal and state budget constraints. Government…
• BIO (Bio-Rad Laboratories, Inc.)
• FY2025 10-K: …and within these countries, our sales efforts are supplemented by distributors and agents. Description of Business Business Segments Bio-Rad operates in two industry segments designated as Life Science and Clinical Diagnostics. Both segments operate worldwide. Our Life Science segment and our Clinical Diagnostics…
• FY2025 10-K: …We believe this direct commercial model enables effective portfolio coverage, deeper customer engagement, and the development of long-term customer relationships. We also use a range of sales and marketing intermediaries ("SMIs") in our international markets. The types of SMIs we utilize are distributors, agents,…
• TECH (BIO-TECHNE Corp)
• FY2025 10-K: Protein Sciences segment accounted for more than 10% of the segment's net sales for fiscal 2025, 2024, and 2023. The Company's Diagnostics and Spatial Biology segment is comprised of the diagnostics reagents division, spatial biology divsion, and molecular diagnostics division. Our Diagnostics and Spatial Biology…
• FY2025 10-K: …us. We strive for every interaction to be seamless, personalized, and exceeding expectations. We aim to deeply understand customers' wants and needs while simultaneously offering high-quality service at every touchpoint. Develop People Through a Transofrmative Culture. As we continue to grow both organically and…
• NEOG (Neogen Corporation)
• FY2025 10-K: …is primarily engaged in the development, production and marketing of diagnostic test kits and related products used by food producers and processors to detect harmful natural toxins, foodborne bacteria, allergens and levels of general sanitation. The Animal Safety segment is primarily engaged in the development,…
• FY2025 10-K: BotVax®, EqStim®, Fura-Zone®, Horse Sense®, ImmunoRegulin®, MACLEOD®, NFZ , PanaKare , Paradefense®, Peraside , Pro-Fix®, Pro-Flex®, RenaKare , Squire®, Stress-Dex®, SureBond®, ThyroKare , Tri-Hist®, Uniprim®, Vet-Tie , Vita-15 Rodent & Control Assault®, Chem-Tech, Ltd. , Chem-Tech's CT logo (with circle) , CT-511®,…

BD Interventional (reported)

• TFX (TELEFLEX INCORPORATED)
• FY2025 10-K: …is permitted. We are currently evaluating this guidance to determine its impact on our consolidated financial statements. In September 2025, the FASB issued new guidance designed to clarify and modernize the accounting for costs related to internal-use software. The updated guidance is intended to provide enhanced…
• FY2025 10-K: …experienced any significant disruptions to our business or operations in connection with these initiatives. However, as we continue our efforts to upgrade and further consolidate our ERP systems, we could experience business disruptions, which could adversely affect customer relationships and divert the attention of…
• MMSI (MERIT MEDICAL SYSTEMS INC)
• FY2025 10-K: …("Teleflex"), Cook Medical Incorporated ("Cook Medical"), Medtronic plc ("Medtronic"), Boston Scientific Corporation ("Boston Scientific"), and Becton, Dickinson and Company ("BD"). Our primary competitors in our cardiac intervention market are BD, Teleflex, Medtronic, Abbott Laboratories, Terumo Corporation, Edwards…
• FY2025 10-K: …of cardiology, radiology, oncology, critical care and endoscopy. This marketplace is characterized by rapid technological advancement, industry and customer consolidation, customer demands for price reductions, regulatory reform, and evolving patient needs. We compete with companies of varying sizes. Many of our…
• SNN (Smith & Nephew plc)
• FY2025 20-F: …use in conjunction with the INTELLIO Connected Tower. From one centralised location, operating room staff have the ability to remotely control and adjust the INTELLIO 4K Surgical Imaging System, the DYONICS◊ POWER II Control System, the WEREWOLF COBLATION System and the DOUBLEFLO◊ Inflow/Outflow Pump. The INTELLIO 4K…
• FY2025 20-F: …ALLEVYN COMPLETE CARE Dressing demonstrates a distinct mechanism of action through layer-to-layer frictional sliding to absorb and dissipate friction and shear forces.65 This mechanism of action can help significantly reduce the harmful stress concentrations that cause pressure injuries. The LEAF Patient Monitoring…
• PEN (Penumbra, Inc)
• FY2025 10-K: …build our inventory of components and finished goods in advance of sales, which may cause quarterly fluctuations in our operating results and financial condition. • Publications of clinical results by us, our competitors and other third parties can have a significant influence on whether, and the degree to which, our…
• FY2025 10-K: …have enabled us to rapidly innovate in a highly efficient manner. We sell our products to healthcare providers primarily through our direct sales organization in the United States, most of Europe, Canada, Australia and Singapore, as well as through distributors in select international markets. We generated revenue of…
• ATRC (AtriCure, Inc.)
• FY2025 10-K: AtriCure Solutions and Products We believe that we are currently the market leader in the surgical treatment of Afib and LAAM, and pioneers of the application of Cryo Nerve Block in cardiac, thoracic and amputation surgical procedures. We anticipate that substantially all our revenue for the foreseeable future will…
• FY2025 10-K: BOX generator along with a variety of single-use disposable probes. The primary differences between these cryoablation probes is the form of the tissue-contacting distal end. The various configurations of cryoICE devices enable the user to make linear ablations of varied length, providing the surgeon with options to…
• ICUI (ICU MEDICAL INC/DE)
• FY2025 10-K: …reliability, patent protection, ease of use and the pricing of our products, in addition to the access to distribution channels. We encounter significant competition in this market both from global, large, established medical device manufacturers and from smaller companies. We compete with products and systems…
• FY2025 10-K: ; and Stepstone Group, Inc. since 2020. Mr. Hoffmeister received a bachelor's of science degree from University of Minnesota and a M.B.A. from University of Chicago. The Board believes Mr. Hoffmeister should serve as a director due to his strong finance background and extensive experience as a chief financial officer…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.