Citi has resumed coverage of Becton Dickinson, assigning a Buy rating and setting a $233 price objective for the company, citing the planned divestiture of BD's Life Sciences Bioprocessing unit as a catalyst that narrows the company's strategic focus. The sale, scheduled to close on February 9, 2026, will leave BD as a standalone medical technology company operating across four defined segments: Medical Essentials, Connected Care, Biopharma Systems and Interventional.
According to Citi, those four areas together represent an addressable market of roughly $70 billion that is expanding at an annual rate of about 5%. The bank said that corporate restructurings and spin-offs can encourage tighter strategic emphasis and more consistent operational execution, and it expects BD to benefit from that dynamic once the Life Sciences unit is divested.
Citi emphasized that BD will need to deliver steady mid-single-digit top-line growth that converts into faster growth in earnings, a requirement that takes on added weight during an impending finance leadership transition at the company. The bank noted that the flow of proceeds from the Life Sciences sale should materially strengthen BD's balance sheet.
Specifically, Citi expects approximately $4 billion of sale proceeds to be allocated evenly between debt paydown and share repurchases, while BD is also expected to sustain investment in research and development. The company has already announced an immediate share repurchase program totaling 10 million shares and confirmed its dividend at $1.05 per share.
Near-term financial reporting will reflect the transition. Citi expects BD's fiscal first-quarter 2026 results to still include the Life Sciences business, with revenue from the divested unit moving to discontinued operations beginning in the second quarter. For fiscal 2026 overall, operating margins are expected to be roughly flat year on year, aided in part by about six months of transitional service income related to the sale. At the same time, Citi projects the company tax rate to rise from the unusually low level recorded in the prior year.
Citi's $233 target is derived from applying a multiple of 16 to 17 times its estimate of BD's 2027 earnings. The firm called out several potential headwinds that could affect the outlook, including the broader economic backdrop, execution risks, competitive pressure and uncertainties around product development. Nonetheless, Citi concluded that a simplified business profile supports a more constructive view on BD's stock.
Contextual notes - The assessment rests on the completed sale reshaping BD into a pure-play MedTech company across the four named segments, the expected allocation of roughly $4 billion in proceeds split between debt reduction and buybacks, the announced 10 million share repurchase program and a maintained quarterly dividend of $1.05 per share. Fiscal reporting timing places the Life Sciences business within continuing operations through FY Q1 2026 and within discontinued operations from Q2 onward. Operating margins for fiscal 2026 are modeled as flat year on year with an increased tax rate versus last year. The price target uses a 16-17x multiple on estimated 2027 earnings.