Piper Jaffray Maintains Neutral Rating On BDX

Given the recent Middle East turmoil and the resulting volatility in oil prices, “we felt an analysis of Becton, Dickinson and Company's BDX exposure to oil prices was a prudent exercise,” Piper Jaffray reports.

“As a reminder, BD utilizes oil-based resins as an input in multiple products and historically, rising oil prices have unfavorably impacted BD's resin costs and gross margin,” Piper Jaffray writes.

“We anticipate the impact represents a minimal threat to 2Q11, but if current rates hold or continue to increase, we anticipate gross margin pressure beginning in 2H11. Assuming ~$100 oil holds, we estimate a ~$0.04 impact to our F2011 estimate and are adjusting our model accordingly. We maintain our Neutral rating on BDX shares.”

Becton Dickinson and Company closed Thursday at $81.07.