DCF Studio

    BDX · NYQ · Healthcare

    Becton, Dickinson and Company

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 74.44

    Market price

    USD 198.60

    Implied upside

    -62.5%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-09-30

    AdjustedReported capital expenditure averages 4.19% of revenue against depreciation and amortisation of 11.56%. A business cannot depreciate more than it invests indefinitely. Capex has been set to 11.56% of revenue so the forecast is not handed free growth. The accounts do not separate depreciation from amortisation, so the combined charge is used - if a large part of it is amortisation of an acquisition, the reported capex is probably right and this substitution is not. Override it if the reported figure is right.

    Value Per Share

    Perpetuity growth
    USD 74.44-62.5%
    Exit multiple
    USD 139.32-29.8%
    Market price
    USD 198.60

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn3bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 19.3bnUSD 19.7bnUSD 20.2bnUSD 20.7bnUSD 21.1bnUSD 21.6bnUSD 22.2bnUSD 22.7bnUSD 23.3bnUSD 23.8bn+2.4%
    EBITUSD 2.6bnUSD 2.6bnUSD 2.7bnUSD 2.8bnUSD 2.8bnUSD 2.9bnUSD 3.0bnUSD 3.0bnUSD 3.1bnUSD 3.2bn+2.4%
    NOPATUSD 2.3bnUSD 2.4bnUSD 2.4bnUSD 2.5bnUSD 2.6bnUSD 2.6bnUSD 2.7bnUSD 2.7bnUSD 2.8bnUSD 2.9bn+2.4%
    Add depreciation & amortisationUSD 2.2bnUSD 2.3bnUSD 2.3bnUSD 2.4bnUSD 2.4bnUSD 2.5bnUSD 2.6bnUSD 2.6bnUSD 2.7bnUSD 2.8bn+2.4%
    Less capital expenditureUSD -2.2bnUSD -2.4bnUSD -2.5bnUSD -2.7bnUSD -2.9bnUSD -3.1bnUSD -3.2bnUSD -3.4bnUSD -3.6bnUSD -3.9bn+6.3%
    Capex, % of revenue11.6%12.1%12.6%13.1%13.6%14.1%14.6%15.1%15.6%16.2%-
    Less increase in working capitalUSD 561.0mUSD -96.4mUSD -99.8mUSD -103.4mUSD -107.1mUSD -110.9mUSD -115.0mUSD -119.1mUSD -123.5mUSD -128.0m-
    Free cashflow to firmUSD 2.9bnUSD 2.2bnUSD 2.1bnUSD 2.1bnUSD 2.0bnUSD 2.0bnUSD 1.9bnUSD 1.8bnUSD 1.7bnUSD 1.7bn-6.0%
    Discount factor0.96870.90890.85290.80030.75090.70460.66120.62040.58210.5462-
    Present valueUSD 2.8bnUSD 2.0bnUSD 1.8bnUSD 1.7bnUSD 1.5bnUSD 1.4bnUSD 1.2bnUSD 1.1bnUSD 1.0bnUSD 905.8m-
    Present Value Of The ForecastUSD 15.5bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.518Reported 0.280, pulled toward 1.0 (Blume)
    Cost of equity7.08%Risk-free + beta x equity risk premium
    Cost of debt5.67%Risk-free + 78bp, the spread for a A rating at 4.9x interest cover. Book interest / average debt was lower, at 3.1%.
    Market capitalisationUSD 54.1bn73.8% of capital
    Total debtUSD 19.2bn26.2% of capital, book value as a proxy
    Tax rate9.5%Effective, capped at statutory
    WACC6.57%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 74.44

    61% of EV

    Forecast FCFF, final year
    USD 1.7bn
    Capex at depreciation, working capital in reinvestment
    USD 2.9bn
    Less reinvestment at g/ROIC (38.0% of NOPAT)
    USD -1.1bn
    Capitalised
    USD 1.8bn
    ROIC (WACC floor)
    6.6%
    Terminal value, undiscounted
    USD 45.0bn
    Terminal value, discounted
    USD 24.6bn
    Enterprise value
    USD 40.0bn
    Less net debt
    USD 18.5bn
    Equity value
    USD 21.5bn

    Exit at 13.3x EBITDA

    Value per shareUSD 139.32

    74% of EV

    Terminal value, undiscounted
    USD 79.2bn
    Terminal value, discounted
    USD 43.3bn
    Enterprise value
    USD 58.7bn
    Less net debt
    USD 18.5bn
    Equity value
    USD 40.2bn

    Spread between methods: 61%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    4.57%154.59159.43167.85183.22215.30
    5.57%103.76101.3999.0296.6594.28
    6.57%78.2476.3474.4472.5470.64
    7.57%59.5057.9456.3854.8253.26
    8.57%45.1843.8742.5741.2739.96

    Outlined: this model. Green text: above today's price of 198.60. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year5.0%0.9%9.1%
    EBIT margin14.2%13.4%25.3%
    Discount rate-6.6%4.3%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.