Becton (BDX:NYS) Fundamental Valuation Report

Fundamental Valuation Report

Becton(BDX:NYS)

Healthcare:Medical Instruments & Supplies

This Report was generated using the valuation tools available on StockCalc.com. For a free 30 day trial click here.

Close Price/Date
$242.04 (USD) 21/11/2018

Weighted Valuation
$238.57 (USD)

Overall Rating
Fairly valued to slightly Overvalued by 1.4%

Valuation Models Analyst Consensus: $253.00 (USD)
(in order of importance) Discounted Cash Flow: $232.40 (USD)
Multiples: $207.65 (USD)
Valuation Methods This company is:
Cash Flow: Fairly valued on a Cash Flow Valuation
Comparable Company: Overvalued on a Comparable Valuation
Asset: Undervalued on an Asset Valuation

Company Overview (BDX:NYS USD)

Price 242.04
Range 240.54 – 244.40
52 week 210.60 – 264.38
Open 241.13
Vol / Avg. 998332/1.31M
Mkt cap 64.04B
P/E 96.43
Div/yield 3.00/0.01
EPS 0.60
Shares 268.26M
Beta 1.20

Company Description

Becton, Dickinson is the world’s largest manufacturer and distributor of medical surgical products, such as needles, syringes, and sharps-disposal units. The company also manufactures diagnostic instruments and reagents, as well as flow cytometry and cell-imaging systems. International revenue accounts for less than 50% of the company’s business. With CareFusion, BD has entered into medical systems (such as infusion pumps and ventilators) as well as procedural solutions businesses. The Bard deal gives the company a presence in urology, vascular, and oncology.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for BDX:NYS

Using a discounted cash flow model we generated an intrinsic value of $232.40 (USD) for BDX:NYS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

BDX:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $232.40 1% 5% 1% 5%
WACC (or Ke) 7.86 $302.88 $185.58
Terminal Growth Rate 2.90 $189.86 $296.41
Tax Rate 0.30 $250.97 $213.83
Cash Flow 5,439,131,229 $219.31 $245.49
Capital Expenditures 0 $232.40 $232.40
Long Term Debt 11,912,000,000 $234.62 $230.18

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $132.14 (USD) for BDX:NYS. We also generated a valuation of $148.20 (USD) using other metrics and comparables.
The comparable companies were and Baxter International (BAX:NYS).

Company BDX:NYS End Date Value
Earnings/Share $0.60 (USD)
Book Value/Share $79.61 (USD)
Sales/Share $58.08 (USD)
Cash Flow/Share $10.57 (USD)
EBITDA/Share $14.58 (USD)
Price Based on Comps Adjustment Factor (%)
$22.59 (USD) -43.2
$298.18 (USD) 5.1
$182.50 (USD) -37.1
$104.22 (USD) -54.2
$216.18 (USD) 0.0
BDX:NYS Ratios Used Average Values BAX:NYS
91.83 PE Ratio 37.66 37.66
2.90 PB Ratio 3.75 3.75
3.97 PS Ratio 3.14 3.14
21.80 PCF Ratio 17.54 17.54
23.86 EV to EBITDA 14.83 14.83

Multiples

Using a multiples approach we generated a valuation of  $207.65 (USD) for BDX:NYS

Company BDX:NYS End Date Value
Earnings/Share $0.60 (USD)
Book Value/Share $79.61 (USD)
Sales/Share $58.08 (USD)
Cash Flow/Share $10.57 (USD)
EBITDA/Share $14.58 (USD)
Price Based on Comps Adjustment Factor
$22.21 (USD) 0
$348.00 (USD) 0
$187.03 (USD) 0
$185.87 (USD) 0
$295.13 (USD) 0
Ratios Ratio Average
PE Ratio 37.01
PB Ratio 4.37
PS Ratio 3.22
PCF Ratio 17.58
EV to EBITDA 20.25

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  BDX:NYS for the last 10 years was  4.32

We ran the Adjusted Book Value for  BDX:NYS and generated a book value of  $78.27 (USD)
By multiplying these we get an adjusted valuation of  $337.92 (USD)

Analyst Data

In the Stockcalc database there are 2 analysts that provide a valuation for BDX:NYS. The 2 analysts have a concensus valuation for BDX:NYS for 2019 of $253.00 (USD).

BDX:NYS Becton

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
2 2 0 4.0000 Outperform 2018-11-21

Current Price: 242.04 USD

Analyst Consensus
USD Millions 2019 2020
Mean EPS 12.55 13.40
# EPS Analysts 2 1
Mean Revenue 17,811.80
# Revenue Analysts 1
Mean Target Price 253.00
Mean Cash Flow 10.75
Mean EBITDA 4,272.00
Mean Net Income 3,629.80
Mean Debt Outstanding
Mean Tax Rate
Mean Growth Rate 10.65
Mean Capital Expenditure 901.50

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

Notice to User


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