Becton Dickinson (BDX) Fell Due to Decline in Organic Revenue Growth

Kovitz Investment Group Partners, LLC, an investment management company, released its “Kovitz Core Equity Strategy” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the second quarter, the strategy returned 7.9% compared to the S&P 500’s 10.9% return. Equity markets saw notable volatility after the President's "Liberation Day" tariff announcement on April 2nd. The S&P 500 dropped 11% initially but later rallied 25% in the quarter after the tariffs were postponed by 90 days on April 9th. Additionally, you can review the fund’s top 5 holdings to see its best picks for 2025.

In its second-quarter 2025 investor letter, Kovitz Core Equity Strategy highlighted stocks such as Becton, Becton, Dickinson and Company (NYSE:BDX). Becton, Dickinson and Company (NYSE:BDX) is a healthcare company that develops and manufactures medical supplies, devices, laboratory equipment, and diagnostic products. The one-month return of Becton, Dickinson and Company (NYSE:BDX) was 0.79%, and its shares lost 23.96% of their value over the last 52 weeks. On August 5, 2025, Becton, Dickinson and Company (NYSE:BDX) stock closed at $176.89 per share, with a market capitalization of $50.698 billion.

Kovitz Core Equity Strategy stated the following regarding Becton, Dickinson and Company (NYSE:BDX) in its second quarter 2025 investor letter:

"Becton, Dickinson and Company (NYSE:BDX) stock suffered a 24% decline in the quarter as organic revenue growth of +1% undershot expectations for +3% revenue growth, compelling five sell-side analysts to downgrade their recommendations on the stock, which seems to us representative of how emotions exacerbate stock price moves. Earnings exceeded expectations for the quarter, and expectations for the full fiscal year fell by just 1 to 2% after the report. We think the stock price overreacted, and we used share price weakness to add to the position. The crux of the negative sentiment on Becton is that it may be a business that grows between 3-5% rather than one that grows between 5-6%. We’d note that the company grew its base (ex COVID-19 testing revenue) revenue organically by 7% from fiscal 2021 to 2024. Whether the company grows organic revenue at 4.5% or 5.5% going forward, we’re not sure. But we do feel confident that in either case the stock is worth more than its current valuation of less than 12x forward earnings. Tariff impacts, Chinese volume-based procurement discounts, customer inventory management dynamics, and some transitory competitive product impacts all had impacts on recent revenue growth. However, margin expansion has exceeded expectations, investments have set up an expected revenue acceleration, and the smoothing effects of time on normal business vicissitudes are set to improve growth relative to last quarter’s result. Becton Dickinson is the category leader in product lines representing 75% of its revenue, 85% of its revenue is recurring, the business is highly profitable, and demographics portend increasing demand for its products over the coming decades. We feel pleased to have the opportunity to be invested in the stock at recent prices."

Becton, Dickinson and Company (NYSE:BDX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 54 hedge fund portfolios held Becton, Dickinson and Company (NYSE:BDX) at the end of the first quarter, which was 56 in the previous quarter. While we acknowledge the potential of Becton, Dickinson and Company (NYSE:BDX) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Becton, Dickinson and Company (NYSE:BDX) and shared stock recommendations from Grok's stock advice. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.