NEW YORK (TheStreet) -- Shares of Becton, Dickinson & Co. (BDX) - Get Report are up 9.63% to $127 in pre-market trading after it was reported that the company agreed to buy CareFusion (CFN) for $12.2 billion in a cash-and-stock deal that will enhance the company's role in providing drug management and patient safety services to hospitals, Bloomberg reports.
CareFusion stockholders will get $49 in cash and 0.0777 of a Becton, Dickinson share for each share they own, Becton, Dickinson said in a statement. Based on Becton, Dickinson's Oct. 3 price, the deal's value of $58 a share is a 26% premium for investors in CareFusion, Bloomberg said.
Shares of Carefusuion are up 25.62% to $58 in pre-market trading.
The transaction is expected to close in the first half of 2015.
TheStreet Ratings team rates BECTON DICKINSON & CO as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate BECTON DICKINSON & CO (BDX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, increase in stock price during the past year, expanding profit margins and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Health Care Equipment & Supplies industry average. The net income increased by 8.1% when compared to the same quarter one year prior, going from $301.55 million to $326.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 7.9%. Since the same quarter one year prior, revenues slightly increased by 5.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The gross profit margin for BECTON DICKINSON & CO is rather high; currently it is at 58.00%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 15.11% is above that of the industry average.
- Net operating cash flow has increased to $439.00 million or 11.70% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -19.56%.
- You can view the full analysis from the report here: BDX Ratings Report