BDX shares fall 3.7% after cutting annual profit forecast
Medical technology company slashes 2026 EPS guidance by 16-17% following $18.8 billion divestiture to Waters Corporation
Becton Dickinson and Company shares fell 3.7% in afternoon trading on Monday after the medical technology manufacturer slashed its annual profit forecast by up to 17%, reflecting the completed divestiture of its Biosciences and Diagnostic Solutions business to Waters Corporation.
The company, which trades under the ticker BDX on the New York Stock Exchange, now expects adjusted earnings per share of $12.35 to $12.65 for fiscal year 2026, down sharply from its previous guidance of $14.75 to $15.05. The reduction comes as the $18.8 billion transaction with Waters Corp closed February 9, fundamentally reshaping the company's business portfolio.
For the first quarter ending December 31, 2025, BD reported adjusted EPS of $2.91, missing analyst estimates of $3.27. Revenue came in at $5.3 billion, up 1.6% year-over-year but falling short of the $5.33 billion consensus forecast. The company's GAAP diluted EPS reached $1.34, representing a 28.8% increase from the prior year's $1.04.
The guidance cut is not indicative of operational deterioration, according to the company, but rather reflects the "corporate overhead transitioning to Waters Corp, anticipated transition services income, and expected benefits from deal proceeds." BD shareholders received 0.135 shares of Waters common stock for each BD share held as of the February 5 record date.
BD plans to deploy $4 billion in cash proceeds from the transaction, with $2 billion allocated toward share repurchases and another $2 billion for debt repayment. The company's remaining business, dubbed "New BD," showed revenue growth of 2.5% on a foreign currency neutral basis in the quarter.
Segment performance revealed diverging trends across the company's portfolio. The Connected Care business delivered $1.13 billion in revenue, up 5.5%, while BD Interventional grew 5.8% to $1.33 billion. Medical Essentials remained relatively flat at $1.60 billion, while BioPharma Systems increased 2.7% to $429 million. The now-divested BD Life Sciences segment declined 8.3% to $766 million.
"With the life sciences business separation completed, BD will have a sharpened strategic focus on high-growth MedTech end markets," said Shagun Singh, analyst at RBC Capital Markets. However, she noted that "the company's return to mid-single-digit growth remains to be demonstrated."
Analysts largely maintained a neutral stance on the stock following the announcement. The consensus rating remains "Hold" with an average target price of $213.36, according to recent analyst data. The stock traded at $202.23 on Monday afternoon, down $7.79 from the previous session.
The divestiture marks a significant strategic pivot for the $59.8 billion market capitalization company, which traces its roots to 1897 when Maxwell Becton and Fairleigh Dickinson founded the business. The move allows BD to concentrate on its core medical device and diagnostic capabilities in medication delivery, specimen management, and patient monitoring, while Waters gains access to clinical and diagnostic applications.
BD also highlighted several operational achievements during the quarter, including FDA 510(k) clearance for its EnCor EnCompass Breast Biopsy and Tissue Removal System, expansion of the PureWick urinary incontinence management portfolio, and the first U.S. hospital implementation of BD Alaris EMR Infusion Interoperability with MEDITECH electronic health records.
Looking ahead, investors will be watching whether the streamlined company can deliver on its growth potential. The forward price-to-earnings ratio of 14.10 suggests the market is discounting the guidance cut, but questions remain about whether the remaining businesses can sustain the revenue growth needed to justify current valuations in a competitive healthcare equipment market.