Cowen: Becton Dickinson Well Positioned Relative To 2016, 2017 Expectations

Cowen said Becton Dickinson and Co BDX is well-positioned relative to F2016 and F2017 revenue and EPS expectations, while reiterating its Outperform rating and $185 price target on the stock.

"The FQ4:2016 Y/Y organic revenue growth rate is expected to be notably higher than those reported in earlier F2016 quarters - much of this is a function of a more favorable Y/Y comparison and continued momentum," analyst Doug Schenkel wrote in a note.

The company expects EPS growth to at least approximate 10 percent in F2017 off of a base that is in at least line with current F2016 guidance ($8.50 - 8.57). Accordingly, Schenkel sees initial F2017 EPS guidance should at least approximate $9.40 - $9.50 (current F2017 EPS consensus is $9.47).

Moreover, the analyst estimate F2017 reported revenue guidance is likely to be about $12.20 billion, adjusted for certain items, while the consensus mean revenue estimate is currently at $12.355 billion.

"Accordingly, there appears to be upside to the current Street F2017 operating margin expansion expectation of ~150bp," Schenkel continued.

Cowen analysts, who met with management, said the meetings suggested that the CareFusion integration process is going at least as well as expected, with revenue and cost synergies remain on track with management expectations.

"While there remains work to do, there appears to be little risk to meeting the current cost synergy target," Schenkel noted.

However, the revenue synergies are expected to benefit BD over a significant time horizon (5+ years) and it should position BD well to meet/exceed its about 5 percent per annum revenue growth target.

At time of writing, shares of Becton Dickinson gained 0.67 percent to $175.12.