Piper Jaffray Raising Becton Dickinson (BDX) Price Target to $171

Piper Jaffray analyst, William Quirk, met with Becton Dickinson (NYSE: BDX) and was confident enough in the meeting to raise his price target to $171 (from $160) despite reducing EPS estimates.

Management reiterated its new, higher $325M-$350M CFN cost synergy guidance, but are targeting over-achievement with a couple of examples such as internal cost reviews. If eliminating public company expenses were the low hanging fruit, plant closures and sales force rationalization the blocking and tackling piece, then new programs to find best practices for the less glamorous side of the business is next. The analyst believes there are longer-term cost synergies that are yet to be factored into consensus expectations.

Management remains bullish on CFN revenue opportunities, with 2/3rds of the synergies coming from outside the US (the remaining 1/3rd is from their U.S.-centric portfolio approach). BDX accelerated product registration earlier in 2015 for several CFN products, including ChloraPrep in several emerging countries such as China (China is now 5% of firm revenue).

Every penny in $/euro is $0.03 to EPS, but management is watching certain currencies more closely (such as the BRL, JPY and CAD) as they have moved more significantly against the dollar (and we suspect have fewer natural hedges). The analyst reduced F1Q16 EPS estimate to $1.87 (from $1.89) and FY16 EPS estimate to $8.36 from $8.42 as a result of the currency exposure, not demand.

No change to Overweight rating.

For an analyst ratings summary and ratings history on Becton Dickinson click here. For more ratings news on Becton Dickinson click here.

Shares of Becton Dickinson closed at $149.96 yesterday.

You May Also Be Interested In

• Unicycive Therapeutics (UNCY) PT Raised to $15 at Benchmark Following Q2 Results
• Deutsche Bank Upgrades Target Hospitality (TH) to Buy
• BofA Securities Starts ProQR Therapeutics N.V. (PRQR) at Buy