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On Friday, Raymond (NSE:RYMD) James made a significant adjustment to its outlook on Becton Dickinson (NYSE:BDX), downgrading the medical technology company’s stock from Outperform to Market Perform. The move comes as the stock has fallen 17.3% in the past week to $169.54, approaching its 52-week low. Analyst Jayson Bedford noted concerns over the company’s growth trajectory.
Bedford’s analysis pointed to a misjudgment in the organic growth profile of Becton Dickinson over recent quarters, prompting a reconsideration of what could potentially reverse the trend. Despite the company’s substantial investment in research and development, which accounts for approximately 6% of sales, Bedford expressed difficulty in pinpointing innovations that could significantly boost growth. This challenge comes even as InvestingPro data shows the company maintaining a healthy 46.3% gross profit margin and achieving 5.9% revenue growth in the last twelve months. The company’s market position appears challenged, with indications that Becton Dickinson may be losing slight market share in its core business.
Previously, Raymond James had perceived Becton Dickinson as a company capable of achieving a 5-6% increase in revenue and an 8-10% rise in earnings per share (EPS), reflecting the growth profile observed in fiscal years 2023 and 2024. However, the firm has now revised its growth expectations for the company, estimating a 3-5% growth in revenue and a 6-8% increase in EPS.
Furthermore, the impact of tariffs is expected to constrain EPS growth even more in fiscal year 2026. While acknowledging the current low market sentiment toward Becton Dickinson and the possibility that the worst-case tariff scenario may already be factored into projections, Bedford stated that it is difficult to identify what could shift this sentiment. This uncertainty ultimately drove the decision to downgrade the stock rating.
In other recent news, Becton Dickinson reported its Q2 2025 earnings, revealing a mixed performance with an earnings per share (EPS) of $3.35, surpassing forecasts, but revenue falling short at $5.27 billion against the anticipated $5.35 billion. The company faces ongoing macroeconomic challenges, including continued pressure in the Chinese market and reductions in research funding, which have led to a revised full-year organic growth guidance from an initial range of 4.0%-4.5% to a new range of 3.0%-3.5%. Meanwhile, several financial firms have adjusted their outlooks on Becton Dickinson. Piper Sandler downgraded the stock from Overweight to Neutral, citing concerns over the company’s growth prospects and execution capabilities. Similarly, Goldman Sachs downgraded the stock to Neutral, adjusting the price target to $192.00, and BofA Securities also downgraded the stock to Neutral, reducing the price target to $190.00. Stifel maintained a Buy rating but lowered the price target to $224.00 due to the company’s underperformance in the second quarter. These developments highlight the cautious sentiment among analysts regarding Becton Dickinson’s near-term growth prospects.
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