Becton, Dickinson and Company (BDX): A Bull Case Theory

We came across a bullish thesis on Becton, Dickinson and Company on Value Don't Lie’s Substack. In this article, we will summarize the bulls’ thesis on BDX. Becton, Dickinson and Company's share was trading at $201.09 as of January 29th. BDX’s trailing and forward P/E were 34.55 and 13.44 respectively according to Yahoo Finance.

Becton, Dickinson and Company develops, manufactures, and sells medical supplies, devices, laboratory equipment, and diagnostic products for healthcare institutions, physicians, life science researchers, clinical laboratories, pharmaceutical industry, and the general public worldwide. BDX is approaching a significant value-unlocking event with its announced Reverse Morris Trust (RMT) transaction involving the spin and merger of its Biosciences & Diagnostic Solutions business with Waters Corporation (WAT), expected to close in 1Q26.

Under the deal announced in July 2025, BDX will receive a combination of cash and equity in the newly combined entity, crystallizing value at an exit multiple exceeding 20x EBITDA. At announcement, the transaction was valued at approximately $17.5 billion, comprising $4 billion in cash and $13.5 billion in Waters stock, based on WAT trading around $350 per share. Since then, Waters’ share price has appreciated materially while BDX shares have largely flatlined, lifting the implied value of the consideration to roughly $18.9 billion, with $4 billion in cash and $14.9 billion in stock.

This dynamic has meaningfully increased the value accruing to stub BDX, or “New BD,” which today trades at an attractive valuation of around 11.9x P/E on the remaining business. At a current share price of $196, BDX carries a market capitalization of roughly $56 billion across 285.5 million shares, suggesting the market is underappreciating the magnitude of proceeds and balance sheet flexibility embedded in the pending transaction.

The substantial cash inflow and retained equity stake in a higher-multiple life sciences platform provide optionality for debt reduction, capital returns, and reinvestment, while sharpening BDX’s focus on its core medical technology franchises. As the RMT closing approaches, the disconnect between the rising transaction value and the static stub valuation positions BDX as an attractively priced spin-off stub with a clear, time-bound catalyst and asymmetric upside as the deal economics become fully reflected in the stock.

Previously, we covered a bullish thesis on West Pharmaceutical Services, Inc. (WST) by Business Model Mastery in May 2025, which highlighted its regulatory entrenchment and proprietary drug delivery components. WST’s stock price has appreciated by approximately 14.73% since our coverage. This is because the thesis played out as durable demand reasserted. Value Don’t Lie shares a similar view but emphasizes corporate action–driven value unlocking at Becton, Dickinson and Company.

Becton, Dickinson and Company is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 41 hedge fund portfolios held BDX at the end of the third quarter which was 58 in the previous quarter. While we acknowledge the potential of 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.

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Disclosure: None.