Citi analysis yields ‘substantial upside’ in Becton Dickinson shares

Citi says that with Becton Dickinson (BDX) shares “languishing,” the call for valuation creation “is loud.” The firm suspects portfolio management could be a pathway following the Embecta spin and Advanced Patient Monitoring acquisition from Edwards Lifesciences in September. The analyst believes the most likely segment to separate could be the Lifesciences franchise, which it says has pressured Becton’s sales given market dynamics. In the least, Citi believes it may be time to look at the asset on a sum-of-the-parts analysis, valuing each of the three businesses separately based off EBITDA and public company comps. Based on its assumptions, Becton Dickinson’s sum-of-the-parts is worth $296 to $322 per share, or 31%-43% upside from current levels. The firm keeps a Buy rating on the name with a $275 price target noting its sum-of-the-parts analysis implies “substantial upside.”