Citi Downgrades Becton Dickinson To Sell

Citi cut Becton Dickinson and Co (NYSE: BDX) to Sell from Neutral as it expects a cyclical U.S. slowdown to drive lower-than-expected organic growth and impact the stock's recently improved valuation versus peers.

The brokerage said it would be tough for the developed markets to sustain its recently elevated growth due to lower healthcare utilization this year, and it is expected continue to fall in 2017, thereby hurting BD's MPS division. Citi also sounded cautious on growth prospects for maturing product cycles such as Alaris and Pyxis.

"We see a diminishing impact on growth from emerging markets, which once contributed over 50 percent of total growth for the company but will likely only contribute about one third of total growth going forward, and as an aside we're slightly cautious on the timing of O-US synergy benefits from CFN. The extra burden will shift to developed markets," analyst Amit Hazan wrote in a note.

As such, Hazan cut his price target to $165 from $167 to reflect lower growth expectations. The analyst also cut 2016/2017 EPS estimates to $8.53/$9.10 from $8.54/$9.16.

Shares of Becton Dickinson closed Thursday's regular trading session at $181.55. In Friday's pre-market hours, they were down 1.20 percent to $179.38.

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!