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Evercore Downgrades Becton Dickinson to Hold

NEW YORK (GenomeWeb) – Investment bank Evercore ISI has downgraded Becton Dickinson's stock to Hold from Buy based on the company's recent outperformance of the market.

Over the past two years, BD has "massively outperformed" the S&P 500 Index, wrote Evercore analyst Vijay Kumar in his note today. Evercore's elevation of Becton to a Buy in June 2013 was based on the idea that the stock was underappreciated.

"Management's margin expansion initiatives were likely to bear fruit as pricing pressures moderated, and capital deployment could provide potential upside optionality," Kumar wrote. "Our thesis has largely played out, with the icing on the cake being the transformational [$12.2 billion] CareFusion acquisition that made BDX into a strategic partner for hospitals."

BD's successes over the past two years have driven up analyst estimates, leading to a price-to-earnings ratio at the high end of the company's historical trading range, Kumar added. All of this means that Becton's shares are now "appropriately priced," in Evercore's view.

The bank also set a $160 price target for the stock.

Morgan Stanley also downgraded BD this week to Equal-Weight from Overweight.

BD was one of 2015's winners in the GenomeWeb Index, with its stock gaining more than 10 percent year over year.

BD shares were trading down more than 2 percent at $145.15 in mid-morning trading on the Nasdaq.