Ricardo Pillai
3 min read
In This Article:
We came across a bullish thesis on Becton, Dickinson and Company on Disruptive Analytics’ Substack by Magnus Ofstad. In this article, we will summarize the bulls’ thesis on BDX. Becton, Dickinson and Company's share was trading at $169.72 as of June 23rd. BDX’s trailing and forward P/E were 32.89 and 11.55 respectively, according to Yahoo Finance.
A laboratory technician in a cleanroom suit inspecting a medical device prototype.
Becton, Dickinson and Company (BDX), a dividend aristocrat with 53 consecutive years of dividend increases, has seen its stock decline over 20% this year, raising concerns among investors despite its traditionally stable, recession-resistant profile. BDX is a global leader in medical technology, manufacturing and distributing medical supplies, diagnostic products, and lab equipment.
However, recent pressures—including weakened demand in diagnostics and biosciences, as well as tariffs on Chinese imports—led the company to cut its guidance during Q1 earnings, exacerbating market pessimism. Activist investor Starboard Value, known for successful interventions at firms like Salesforce and Splunk, has taken a large position in BDX, targeting the company for its perceived undervaluation driven by operational inefficiencies and structural misalignment.
Starboard contends that BDX is trading at a “sum-of-the-parts” discount, as the lower-growth Life Sciences segment weighs down the valuation of the faster-growing, higher-margin MedTech business. To unlock shareholder value, Starboard is pushing for a separation or sale of the Life Sciences division, suggesting that such a move could boost BDX’s valuation by up to 30%. The logic is that the divestiture would sharpen management focus and enhance operational performance.
However, realizing this upside is not straightforward. Early buyer interest has reportedly fallen short of expected valuations, and a spin-off could risk a market re-rating below book value, leading to a potential write-down. While the strategic rationale for separation is strong, the path to execution is fraught with valuation uncertainty. The coming months will reveal whether Starboard can deliver another successful turnaround.
Previously we covered a bullish thesis on West Pharmaceutical Services, Inc. (WST) by Business Model Mastery in May 2025, which highlighted its regulatory moat, entrenched customer relationships, and irreplaceable role in drug delivery systems. The company’s stock price has appreciated approximately by 5.4% since our coverage. This is because the thesis played out. The thesis still stands as structural demand for injectable therapies remains strong. Magnus Ofstad shares a similar view on BDX but emphasizes activist-driven value unlocking through business separation.
