Becton, Dickinson and Company: Future Benefit From GLP-1 Drug Delivery

Core Viewpoint - Becton, Dickinson and Company (BD) is positioned for growth through the acquisition of Edwards Lifesciences' Critical Care product group for $4.2 billion and the expanding GLP-1 drug delivery market, with a reiterated 'Buy' rating and a fair value of $265 per share [1][18]. GLP-1 Drug Delivery - BD's prefilled syringes and self-administered injection systems are set to capitalize on the rapidly growing GLP-1 drug market, projected to reach $72 billion by 2034 with a CAGR of 11.7% from 2024 to 2034 [2]. - BD has secured a strong market share in the prefilled syringe market, being chosen as a partner for 19 out of 23 new biologic drugs, and has signed 40 GLP-1 biosimilar agreements [3]. - The GLP-1 delivery market is expected to contribute at least $1 billion in revenue by 2030, adding approximately 3% to overall revenue growth [3]. Acquisition of Edwards Lifesciences' Critical Care - The acquisition is seen as value accretive, with the Critical Care business projected to grow at 6%-7% annually and a gross margin exceeding 60% [4]. - BD plans to fund the acquisition with $1 billion in cash and $3.2 billion in new debt, expecting a net debt leverage of 3x post-transaction [4]. - This acquisition is anticipated to enhance BD's technology in monitoring and AI-enabled clinical decision-making, supporting long-term growth in critical care [4]. Recent Results and Outlook - BD reported a 5.2% organic revenue growth and a 22.6% adjusted EPS growth for Q3 FY24, while slightly lowering organic revenue guidance but raising EPS guidance for FY24 [5]. - The Medical Segment is expected to grow by 6%, driven by the GLP-1 drug delivery market, while the Life Sciences Segment is forecasted to grow by 5% as comparable issues from the pandemic fade [5]. - The Interventional Segment is projected to grow by 7%, supported by investments in critical care business units [5]. Valuation - BD is estimated to achieve an 8% total revenue growth in the near future, with a DCF model indicating a fair value of $265 per share [7][15]. - The company anticipates margin expansion through new product launches and operational efficiencies, contributing to overall profitability [7]. Conclusion - The GLP-1 drug delivery market and the acquisition of the Critical Care product group are key drivers for BD's growth, reinforcing a positive outlook with a 'Buy' rating and a fair value of $265 per share [18].