U.S. Research Published by Raymond James & Associates

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1 Becton, Dickinson and Company (BDX-NYSE) Lawrence Keusch, (617) , John Hsu, CFA, Sr. Res. Assoc., (617) , Hospital Supplies & Equipment F1Q Results Solid, FY16 Outlook Intact When Looking Through the Noise Recommendation: We maintain our Strong Buy rating on BDX shares. Relative to the Street, BD reported F1Q results with sales missing by 1% and EPS exceeding the consensus by 7%. FX continues to be a considerable headwind (incremental impact of 300 bp, now 450 bp) to FY16 sales growth. However, reflecting strong execution on the CareFusion acquisition and core operational improvements, annual EPS guidance was unchanged. Moreover, we find Street concerns regarding sales acceleration overdone. We expect organic constant currency (cc) sales to rebound from 1.8% in F1Q to the targeted % for FY16 driven by a combination of continued execution, new product launches, and easing comps for CareFusion and emerging markets, especially in the second half of the year. We note the 4.2% underlying organic cc sales growth for F1Q bodes well for growth improving. We find BD well positioned to deliver consistent financial results and have confidence in the EPS outlook. We continue to find the valuation attractive with a 14.6x P/E multiple and 7.3% FCF yield on our calendar 2017 estimates. With the shares under pressure, despite solid fundamentals, we find the share price compelling. Call highlights: 1) When normalizing the 1.8% F1Q pro forma cc sales growth (60 bp flu, 70 bp tough CareFusion comp, timing 90 bp, and sequestration 20 bp), underlying growth was 4.2%. 2) BD faces easing comps in emerging markets (16% of sales), China, and CareFusion, especially in the 2H (see page 3). In turn, we see estimated growth of 4-5% pro forma in F2Q, and 6% in the second half. 3) Although China sales (5% of total) grew 4.5% cc in F1Q, we expect an acceleration to 9-10% for FY16 with F1Q representing the toughest comp with 23% cc growth last year, new CareFusion products, and capital sales forecasts tempered. 4) F1Q EPS exceeded the midpoint of guidance by $0.13. However, incremental FX was $0.28 for FY16, implying an operational improvement of $0.15 in the unchanged annual EPS guidance. 5) BD is on track to reduce its leverage ratio below 3.0x by March 2017 and has paid off ~$1 billion in debt thus far. 6) FY16 assumes a euro of FY16 guidance updated: The outlook for pro forma cc sales growth of % was unchanged. Likewise, reported EPS guidance of $ was also maintained. The FX headwind is now 450 bp on the top line and 900 bp to EPS. Estimates: 2016 revenue is now $12.3 billion from $12.6 billion prior, and no change to EPS. Valuation: Our $176 price target weights P/E (19x) and EV/EBITDA (12x) multiples on CY17 estimates and a 10-year DCF value ($186). Our P/E and EV/EBITDA multiples are justified by low-mid-teens EPS growth (see page 7). Published by Raymond James & Associates February 3, 2016 Company Comment Rating Strong Buy 1 Current and Target Price Current Price (Feb :55 p.m.) $ Target Price: $ Week Range $ $ Suitability Medium Risk/Growth Market Data Shares Out. (mil.) Market Cap. (mil.) $29,667 Avg. Daily Vol. (10 day) 1,221,166 Dividend/Yield $2.64/1.9% BVPS (Sep-15) $34.00 ROE % 11% Net Debt (mil.)/% Cap. $11,370/61% Earnings & Valuation Metrics 2015A 2016E 2017E 2018E P/E (Cash EPS) 19.7x 16.7x 15.0x 13.4x GAAP EPS Old $3.35 $6.71 $7.80 $8.79 New $3.35 $6.20 $7.65 $8.69 P/E Ratios (GAAP) 42.0x 22.7x 18.4x 16.2x CY Cash EPS Old $7.44 $8.66 $9.32 NA New $7.57 $8.56 $9.62 NA EV/EBITDA (CY) 13.8x 12.2x 11.2x 10.3x Company Description Becton, Dickinson and Company (BD), based in Franklin Lakes, New Jersey, is a medical technology company engaged principally in the development, manufacture, and sale of a broad range of medical supplies, devices, laboratory equipment, and diagnostic products used by healthcare institutions, life science researchers, clinical laboratories, industry, and the general public. Cash Q1 Q2 Q3 Q4 Full Total EPS Dec Mar Jun Sep Year Revenues (mil.) 2015A $1.53 $1.61 $2.05 $1.94 $7.16 $10,302 Old 2016E ,616 New 2016E 1.96A ,295 Old 2017E ,129 New 2017E ,795 Old 2018E UR UR UR UR ,654 New 2018E UR UR UR UR ,326 Cash EPS excludes one-time items. UR: Under Review. Please read domestic and foreign disclosure/risk information beginning on page 8 and Analyst Certification on page 8. International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

2 Fiscal First Quarter Variance Analysis Versus Street Consensus ($ mn) 1QA 1QE 1Q 1QA Dec-15 Dec-15 Variance % Change Sales $2,992 $3,035 ($43) 46% Earnings per share $1.96 $1.84 $ % Versus RJ Estimates ($ mn) QA 1QE 1Q 1QA Income statement Dec-15 Dec-15 Variance % Change YoY Comments Revenues $2,992 $3,019 ($27) 46% 1.8% pro-forma cc growth vs. 1-2% guidance; 4.2% underlying growth CC y/y growth: emerging markets +2.4% (vs. tough 12.4% comp) and China +4.5% (vs. 23% tough comp) Cost of goods sold 1,426 1, % Gross profit 1,566 1, % SG&A % R&D (8) 45% Total operating expenses (adjusted) 9,324 9, % Operating income (adjusted) % Interest income Interest expense (105) (101) (4) Other income (expense), net Pretax income (adjusted) % Income tax (6) 45% Lower tax rate added $0.01 versus our model Net income (adjusted) % Earnings per share (adjusted) $1.96 $1.83 $ % +28% y/y (+46% cc) Diluted shares outstanding (0) 10% As a percent of sales: Gross profit 52.3% 51.4% 1.0% 0.4% (+) continuous improvements, mix, and raw materials, partial offset from fx SG&A 24.9% 25.3% 0.4% -1.1% Strong leverage, includes cost synergy capture R&D 6.3% 6.0% -0.3% 0.6% Higher spending associated with medical device tax reinvestment Operating income 21.2% 20.1% 1.1% 1.0% Driven by GM expansion, operational efficiencies, continuous improvement, and cost synergies Effective tax rate 21.5% 21.8% 0.3% 0.5% ($ mn) QA 1QE 1Q 1QA Sales (reported) Dec-15 Dec-15 Variance % Change Comments BD Medical All y/y constant currency growth rates: Medication and Procedural Solutions (20) (3.3%) 2%, strength in pharmacy solutions, infusion therapy, and safety; difficult comp 250 bp headwind Medication Management Solutions % 4.3% despite difficult 40% comparison, high SD growth for infusion Diabetes Care (3.0%) 3.9% driven by solid pen needles growth Pharmaceutical Systems (5.4%) -6.8% reflecting tough comp from final quarter for CareFusion Respiratory Solutions (17.7%) 2.6% strong growth in SAIS, partial offset from order timing Total BD Medical sales 2,059 2,051 8 (3.8%) BD Life Sciences Pricing was flat Preanalytical Systems (0) (2.6%) 4.4% driven by safety growth in US, Europe, and EM Diagnostic Systems (15) (4.7%) -0.8%, mild flu season (400 bp impact), and slowdown of capital spending in China; molecular BD max solid Biosciences sales (20) (7.1%) 1.2%, tender delays in EM, difficult comp last year when sequestration ended Total BD Life Sciences (35) (4.4%) Total sales $2,992 $3,019 ($27) (4.1%) Source: Company data, FactSet Research, Raymond James research. International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

3 Constant Currency Growth (%) Raymond James Fiscal 2016 Updated Guidance Date of guidance 4-Nov-15 3-Feb-15 Comments Fiscal Year Revenue growth guidance Total (reported) % % Pricing roughly flat for the year FX headwind 1.5% 4.5% 300 bp incremental fx headwind Total (constant currency) % % % organic growth; ~4.0% for CareFusion BD Medical (constant currency) % % Driven by dispensing, pen needles, infusion, infection prevention BD Life Sciences (constant currency) 4.5-5% 4-4.5% Guidance reduced on weaker flu and slower capital environment in China Margin guidance Gross margin % % (+) lower resin, BDRX sale partially offset by (-) fx pressure SG&A % % Now reflects med device tax benefit R&D ~6% 6-6.5% Proceeds from med device tax reinvested in R&D Operating income % % bp underlying OM expansion; up from bp prior Tax rate % % Int/other ($ million) ~$400 ~$400 EPS guidance Adjusted EPS $8.37-$8.44 $8.37-$ % accretion from CareFusion, ahead of high teens accretion prior Adjusted EPS growth % % FX headwind ~5% ~9% +4% increase, +1% for euro, +1% developed, +2% other world currencies FX Neutral Growth % % Additional guidance Operating cash flow ($ billion) ~$2.6 ~$2.6 CAPEX ($ million) $ $ Average diluted share count (million) ~217 ~217 Source: Company data, Raymond James research. FY16 Revenue Comparisons 2015 Revenue Growth 1Q 2Q 3Q 4Q guidance China (constant currency) 23.1% 15.1% 15.4% 12.0% 15.4% low DD Emerging Markets (constant currency) 12.4% 7.6% 11.0% 5.9% 9.2% 9-10% CareFusion organic growth 9.9% 5.4% -2.2% 3.4% 3.8% ~4% 1H/2H growth 1H 2H China 19.1% 13.7% -5.4% Emerging Markets 10.0% 8.5% -1.6% CareFusion 7.7% 0.6% -7.1% Note: 2015 growth rates reflect BD's legacy business only. 4Q China growth was adjusted to exclude impact of inventory alignment in distribution channel (8.5% non-adjusted). Source: Company data, Raymond James research. F1Q Organic Revenue Bridge 5% 4% 70 bp 60 bp 20 bp 4.2% 3% 90 bp 2% 1.8% 1% 0% 1Q CC growth Timing CFN 10% growth 1Q 2015 Weaker flu season Sequestration 1Q underlying CC growth Source: Company data, Raymond James research. International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

4 Operating Margin (%) Gross Margin (%) Raymond James F1Q Gross Margin Bridge 54% 54% 53% 130 bp -90 bp 53% 52% 52% 51% 51% 51.9% 52.3% 50% 1Q 15 Comparable Gross Margin Performance Currency Impact 2016 Operating Margin Source: Company data, Raymond James research. F1Q Operating Margin Bridge 22% 220 bp -120 bp 21.2% 20% 20.2% 18% 16% 14% 12% 10% 1Q 15 Comparable Operating Margin Performance Currency Impact 2016 Operating Margin Source: Company data, Raymond James research. International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

5 Income Statement, E ($ thousand) Year 1Q 2Q 3Q 4Q Year 1Q 2QE 3QE 4QE YearE 1QE 2QE 3QE 4QE YearE YearE 2014 Dec-14 Mar-15 Jun-15 Sep Dec-15 Mar-16 Jun-16 Sep Dec-16 Mar-17 Jun-17 Sep Revenues 8,445,447 2,050,610 2,051,000 3,133,000 3,067,400 10,302,010 2,992,100 3,032,089 3,165,103 3,105,295 12,294,588 3,118,322 3,145,506 3,294,091 3,236,971 12,794,889 13,326,169 Cost of goods sold 4,124, , ,000 $1,504,200 1,459,400 4,952,210 1,426,100 1,443,275 1,500,259 1,477,673 5,847,306 1,490,558 1,484,679 1,535,046 1,509,712 6,019,995 6,130,038 Gross profit 4,320,847 1,062,610 1,063,000 1,628,800 1,608,000 5,349,800 1,566,000 1,588,815 1,664,844 1,627,623 6,447,282 1,627,764 1,660,827 1,759,044 1,727,258 6,774,894 7,196,131 SG&A 2,115, , , , ,500 2,539, , , , ,682 2,975, , , , ,249 3,032,389 3,131,650 R&D 514, , , , , , , , , , , , , , , , ,570 Total operating expenses (adjusted) 2,629, , , , ,500 3,172, , , , ,939 3,749, , , , ,468 3,800,082 3,931,220 Operating income (adjusted) 1,691, , , , ,500 2,177, , , , ,684 2,697, , , , ,791 2,974,812 3,264,912 Interest income 46,000 10,000 8,000 2,000 (5,000) 16,000 6,000 6,000 6,000 6,000 24,000 5,000 5,000 5,000 5,000 20,000 20,000 Interest expense (136,000) (32,000) (33,000) (108,000) (107,000) (280,000) (105,200) (104,500) (103,800) (103,100) (416,600) (102,000) (102,000) (102,000) (102,000) (408,000) (400,000) Other income (expense), net (3,000) 2,000 6,000 5,000 (2,000) 12,000 6, , Pretax income (adjusted) 1,598, , , , ,500 1,925, , , , ,584 2,310, , , , ,791 2,586,812 2,884,912 Income tax 365,150 80,000 86, , , , , , , , , , , , , , ,982 Net income (adjusted) 1,233, , , , ,000 1,481, , , , ,848 1,825, , , , ,999 2,056,515 2,307,929 Earnings per share (adjusted) $6.25 $1.53 $1.61 $2.05 $1.94 $7.16 $1.96 $2.04 $2.23 $2.17 $8.41 $2.11 $2.26 $2.54 $2.49 $9.40 $10.48 Diluted shares outstanding 197, , , , , , , , , , , , , , , , ,269 Growth rates Revenues 4.9% 1.8% -1.0% 45.2% 39.3% 22.0% 45.9% 47.8% 1.0% 1.2% 19.3% 4.2% 3.7% 4.1% 4.2% 4.1% 4.2% SG&A 2.9% 0.2% -0.6% 44.2% 37.9% 20.1% 40.0% 44.5% -1.0% -1.2% 17.2% 2.5% 2.2% 1.5% 1.4% 1.9% 3.3% R&D 3.9% 2.4% 1.6% 40.6% 47.4% 23.2% 45.3% 49.0% 11.5% -0.9% 22.3% (0.2%) (1.8%) (1.5%) (0.0%) -0.9% 4.2% Total operating expenses 3.1% 0.6% -0.2% 43.5% 39.8% 20.7% 41.1% 45.4% 1.4% -1.1% 18.2% 2.0% 1.4% 0.8% 1.1% 1.3% 3.5% Operating income 4.3% 6.4% 2.8% 51.1% 48.4% 28.7% 57.8% 55.6% 3.4% 4.5% 23.9% 6.8% 8.9% 12.1% 12.8% 10.3% 9.8% Pretax income 4.3% 6.4% 4.8% 35.8% 30.2% 20.4% 41.6% 38.6% 4.5% 8.6% 20.0% 7.3% 10.8% 14.2% 14.9% 11.9% 11.5% Income tax -2.8% -9.1% 2.7% 44.5% 41.4% 21.6% 45.0% 35.7% -12.0% -5.1% 9.3% 2.4% 8.9% 12.3% 12.9% 9.3% 8.8% Net Income 6.6% 11.5% 5.4% 33.1% 27.1% 20.0% 40.7% 39.3% 9.9% 12.9% 23.3% 8.6% 11.3% 14.7% 15.5% 12.7% 12.2% Earnings per share 7.6% 12.1% 5.3% 22.0% 15.7% 14.5% 28.2% 26.9% 8.7% 11.8% 17.5% 7.6% 10.4% 13.8% 14.6% 11.8% 11.5% Diluted shares outstanding -1.0% -0.6% 0.0% 9.1% 9.8% 4.8% 9.8% 9.8% 1.1% 1.0% 4.9% 0.9% 0.8% 0.8% 0.7% 0.8% 0.7% Margin analysis Gross margin 51.2% 51.8% 51.8% 52.0% 52.4% 51.9% 52.3% 52.4% 52.6% 52.4% 52.4% 52.2% 52.8% 53.4% 53.4% 53.0% 54.0% Operating margin 20.0% 19.6% 20.6% 21.9% 21.7% 21.1% 21.2% 21.7% 22.5% 22.4% 21.9% 21.7% 22.8% 24.2% 24.2% 23.3% 24.5% Pretax margin 18.9% 18.6% 19.7% 18.7% 17.9% 18.7% 18.1% 18.5% 19.4% 19.2% 18.8% 18.6% 19.7% 21.3% 21.2% 20.2% 21.6% Net margin 14.6% 14.7% 15.5% 14.1% 13.7% 14.4% 14.2% 14.6% 15.3% 15.2% 14.8% 14.8% 15.7% 16.9% 16.9% 16.1% 17.3% As a % of sales Cost of goods sold 48.8% 48.2% 48.2% 48.0% 47.6% 48.1% 47.7% 47.6% 47.4% 47.6% 47.6% 47.8% 47.2% 46.6% 46.6% 47.1% 46.0% SG&A 25.0% 25.9% 24.9% 24.3% 24.4% 24.6% 24.9% 24.4% 23.8% 23.8% 24.2% 24.5% 24.0% 23.2% 23.1% 23.7% 23.5% R&D 6.1% 6.3% 6.3% 5.7% 6.4% 6.1% 6.3% 6.3% 6.3% 6.3% 6.3% 6.0% 6.0% 6.0% 6.0% 6.0% 6.0% Total operating expenses 31.1% 32.2% 31.2% 30.0% 30.8% 30.8% 31.2% 30.7% 30.1% 30.0% 30.5% 30.5% 30.0% 29.2% 29.1% 29.7% 29.5% Tax rate 22.8% 21.0% 21.3% 24.8% 23.9% 23.1% 21.5% 20.9% 20.9% 20.9% 21.0% 20.5% 20.5% 20.5% 20.5% 20.5% 20.0% International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

6 Pro Forma Revenue Analysis, E ($ thousand) Year 1Q 2Q 3Q 4Q Year 1Q 2QE 3QE 4QE YearE 1QE 2QE 3QE 4QE YearE YearE 2014 Dec-14 Mar-15 Jun-15 Sep Dec-15 Mar-16 Jun-16 Sep Dec-16 Mar-17 Jun-17 Sep BD Medical Medication and Procedural Solutions 3,347, , , , ,300 3,393, , , , ,434 3,391, , , , ,691 3,544,721 3,713,237 Medication Management Solutions 2,023, , , , ,800 2,085, , , , ,872 2,144, , , , ,416 2,251,990 2,342,070 Diabetes Care 1,036, , , , ,000 1,011, , , , ,348 1,008, , , , ,802 1,045,213 1,102,700 Pharmaceutical Systems 1,228, , , , ,000 1,167, , , , ,384 1,140, , , , ,325 1,169,671 1,204,761 Respiratory Solutions 871, , , , , , , , , , , , , , , , ,340 Total BD Medical sales $8,507,000 $2,141,000 $2,102,000 $2,212,100 $2,091,100 $8,546,890 $2,059,100 $2,059,654 $2,241,470 $2,121,701 $8,481,925 $2,148,002 $2,137,678 $2,339,698 $2,206,347 $8,831,726 $9,207,109 BD Life Sciences Preanalytical Systems 1,411, , , , ,500 1,413, , , , ,309 1,419, , , , ,174 1,474,950 1,532,126 Diagnostic Systems 1,301, , , , ,800 1,310, , , , ,137 1,290, , , , ,223 1,341,694 1,395,396 Biosciences sales $1,158,600 $288,150 $317,100 $269,400 $286,000 $1,160,650 $275,600 $302,995 $249,839 $274,148 $1,102,583 $286,624 $312,085 $258,584 $289,226 $1,146,519 $1,191,538 Total BD Life Sciences $3,872,000 $979,000 $945,000 $920,850 $976,300 $3,885,080 $933,000 $972,436 $923,633 $983,594 $3,812,663 $970,320 $1,007,828 $954,392 $1,030,623 $3,963,163 $4,119,061 Total sales $12,380,000 $3,121,000 $3,048,000 $3,133,000 $3,067,400 $12,431,970 $2,992,100 $3,032,089 $3,165,103 $3,105,295 $12,294,588 $3,118,322 $3,145,506 $3,294,091 $3,236,971 $12,794,889 $13,326,169 YoY growth rate BD Medical Systems Medication and Procedural Solutions 6.3% 5.0% 2.8% -0.8% -1.3% 1.4% -3.3% -1.4% 2.1% 2.4% -0.1% 5.0% 4.0% 5.0% 4.0% 4.5% 4.8% Medication Management Solutions 5.5% 10.0% 7.1% -9.3% 8.2% 3.1% 1.9% 1.7% 5.1% 2.5% 2.8% 5.0% 5.0% 5.0% 5.0% 5.0% 4.0% Diabetes Care 7.0% -0.1% -1.8% -5.2% -2.6% -2.4% -3.0% -1.8% 1.9% 1.7% -0.3% 3.8% 3.0% 3.8% 4.0% 3.7% 5.5% Pharmaceutical Systems 7.6% -6.0% -6.3% -5.5% -2.6% -5.0% -5.4% -4.7% -0.4% -0.2% -2.3% 1.0% 2.5% 3.0% 3.0% 2.5% 3.0% Respiratory Solutions 29.3% 45.4% -5.6% -5.8% -15.4% 2.1% -17.7% -10.1% -8.9% -2.9% -10.4% 3.5% 2.5% 3.0% 3.0% 3.0% 3.0% Total BD Medical sales 8.4% 7.9% 0.9% -4.8% -1.1% 0.5% -3.8% -2.0% 1.3% 1.5% -0.8% 4.3% 3.8% 4.4% 4.0% 4.1% 4.3% BD Life Sciences Preanalytical Systems 4.4% 1.8% 6.0% -4.0% -2.6% 0.2% -2.6% -1.1% 3.1% 2.5% 0.5% 4.0% 3.0% 3.5% 5.0% 3.9% 3.9% Diagnostic Systems 0.5% 4.0% 6.0% -4.2% -2.5% 0.7% -7.1% -5.7% 3.9% 3.0% -1.6% 4.0% 5.0% 3.0% 4.0% 4.0% 4.0% Biosciences 5.2% 3.3% 5.0% -2.7% -4.9% 0.2% -4.4% -4.4% -7.3% -4.1% -5.0% 4.0% 3.0% 3.5% 5.5% 4.0% 3.9% Total BD Life Sciences 3.3% 2.9% -1.2% -3.7% -3.2% 0.3% -4.7% 2.9% 0.3% 0.7% -1.9% 4.0% 3.6% 3.3% 4.8% 3.9% 3.9% Total sales 6.7% 6.3% 0.3% -4.5% -1.8% 0.4% -4.1% -0.5% 1.0% 1.2% -1.1% 4.2% 3.7% 4.1% 4.2% 4.1% 4.2% International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

7 Discounted Cash Flow Analysis, E ($ thousand) E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E EBITA $2,177,400 $2,697,433 $2,974,812 $3,264,912 $3,436,468 $3,625,462 $3,833,740 $4,063,387 $4,316,760 $4,596,526 $4,905,708 Minus: taxes (446,367) (552,974) (609,836) (669,307) (704,476) (743,220) (785,917) (832,994) (884,936) (942,288) (1,005,670) Plus: depreciation 545, , , , , , , , , , ,343 Minus: changes in working capital 664,200 42,725 59,755 30,475 30,780 31,087 31,398 31,712 32,029 32,350 32,673 Minus: capital expenditures (720,072) (783,247) (791,819) (799,570) (834,770) (873,605) (916,432) (963,649) (1,015,708) (1,073,119) (1,136,457) Unlevered free cash flow 892,398 1,970,100 2,191,531 2,498,800 2,492,520 2,632,754 2,787,317 2,957,768 3,145,868 3,353,609 3,583,250 Discount period - months Discount period - years Discount factor Present value of annual cash flows 892,398 1,847,398 1,927,046 2,060,384 1,927,203 1,908,848 1,895,046 1,885,688 1,880,695 1,880,020 1,883,647 Terminal value 64,146,815 Valuation Equity value per diluted share Present value of cash flows 18,104,726 WACC Residual growth rate Present value of terminal value 33,720,763 $ % 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% Enterprise value 51,825, % $237 $261 $291 $329 $380 $451 $557 $735 Minus: net debt 11,397, % $ Equity value 40,427, % $ Equity value per diluted share $ % $ Current share price $ % $ Upside potential 33% 7.50% $ % $ WACC calculation 8.50% $ Cost of equity (CAPM) 7.8% 9.00% $ Beta 0.7 Equity risk premium 5.0% Assumptions Implied multiples Risk free rate 4.0% WACC 6.6% EV/2015 EBITDA 19.0x Cost of debt 6.0% Residual growth rate 1.0% EV/2016E EBITDA 15.5x Tax-adjusted cost of debt 4.8% Diluted shares outstanding 217,044 Percent equity 68.6% Tax rate 20.5% Percent debt 31.4% Price Target Methodology 2017 Calendar Estimates Target multiple % weight Value P/E $9.62 EPS 19x 40% $75 EV/EBITDA $3733 EBITDA 12x 30% $46 10-year DCF value $186 30% $56 Price target $176 International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

8 Important Investor Disclosures Raymond James & Associates (RJA) is a FINRA member firm and is responsible for the preparation and distribution of research created in the United States. Raymond James & Associates is located at The Raymond James Financial Center, 880 Carillon Parkway, St. Petersburg, FL 33716, (727) Non-U.S. affiliates, which are not FINRA member firms, include the following entities that are responsible for the creation and distribution of research in their respective areas: in Canada, Raymond James Ltd. 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Several factors enter into the bonus determination including quality and performance of research product, the analyst's success in rating stocks versus an industry index, and support effectiveness to trading and the retail and institutional sales forces. Other factors may include but are not limited to: overall ratings from internal (other than investment banking) or external parties and the general productivity and revenue generated in covered stocks. The views expressed in this report accurately reflect the personal views of the analyst(s) covering the subject securities. No part of said person's compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this research report. In addition, said analyst has not received compensation from any subject company in the last 12 months. Ratings and Definitions Raymond James & Associates (U.S.) definitions Strong Buy (SB1) Expected to appreciate, produce a total return of at least 15%, and outperform the S&P 500 over the next six to 12 months. For higher yielding and more conservative equities, such as REITs and certain MLPs, a total return of at least 15% is expected to be realized over the next 12 months. Outperform (MO2) Expected to appreciate and outperform the S&P 500 over the next months. For higher yielding and more conservative equities, such as REITs and certain MLPs, an Outperform rating is used for securities where we are comfortable with the relative safety of the dividend and expect a total return modestly exceeding the dividend yield over the next months. International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

9 Market Perform (MP3) Expected to perform generally in line with the S&P 500 over the next 12 months. Underperform (MU4) Expected to underperform the S&P 500 or its sector over the next six to 12 months and should be sold. Suspended (S) The rating and price target have been suspended temporarily. This action may be due to market events that made coverage impracticable, or to comply with applicable regulations or firm policies in certain circumstances, including when Raymond James may be providing investment banking services to the company. The previous rating and price target are no longer in effect for this security and should not be relied upon. Raymond James Ltd. (Canada) definitions Strong Buy (SB1) The stock is expected to appreciate and produce a total return of at least 15% and outperform the S&P/TSX Composite Index over the next six months. Outperform (MO2) The stock is expected to appreciate and outperform the S&P/TSX Composite Index over the next twelve months. Market Perform (MP3) The stock is expected to perform generally in line with the S&P/TSX Composite Index over the next twelve months and is potentially a source of funds for more highly rated securities. Underperform (MU4) The stock is expected to underperform the S&P/TSX Composite Index or its sector over the next six to twelve months and should be sold. Raymond James Argentina S.A. rating definitions Strong Buy (SB1) Expected to appreciate and produce a total return of at least 25.0% over the next twelve months. Outperform (MO2) Expected to appreciate and produce a total return of between 15.0% and 25.0% over the next twelve months. Market Perform (MP3) Expected to perform in line with the underlying country index. Underperform (MU4) Expected to underperform the underlying country index. Suspended (S) The rating and price target have been suspended temporarily. This action may be due to market events that made coverage impracticable, or to comply with applicable regulations or firm policies in certain circumstances, including when Raymond James may be providing investment banking services to the company. The previous rating and price target are no longer in effect for this security and should not be relied upon. Raymond James Europe (Raymond James Euro Equities SAS & Raymond James Financial International Limited) rating definitions Strong Buy (1) Expected to appreciate, produce a total return of at least 15%, and outperform the Stoxx 600 over the next 6 to 12 months. Outperform (2) Expected to appreciate and outperform the Stoxx 600 over the next 12 months. Market Perform (3) Expected to perform generally in line with the Stoxx 600 over the next 12 months. Underperform (4) Expected to underperform the Stoxx 600 or its sector over the next 6 to 12 months. Suspended (S) The rating and target price have been suspended temporarily. This action may be due to market events that made coverage impracticable, or to comply with applicable regulations or firm policies in certain circumstances, including when Raymond James may be providing investment banking services to the company. The previous rating and target price are no longer in effect for this security and should not be relied upon. In transacting in any security, investors should be aware that other securities in the Raymond James research coverage universe might carry a higher or lower rating. Investors should feel free to contact their Financial Advisor to discuss the merits of other available investments. Rating Distributions Coverage Universe Rating Distribution* Investment Banking Distribution RJA RJL RJ Arg RJEE/RJFI RJA RJL RJ Arg RJEE/RJFI Strong Buy and Outperform (Buy) 56% 66% 59% 48% 21% 38% 0% 0% Market Perform (Hold) 39% 34% 41% 37% 7% 15% 0% 0% Underperform (Sell) 6% 1% 0% 15% 7% 0% 0% 0% * Columns may not add to 100% due to rounding. Suitability Ratings (SR) Medium Risk/Income (M/INC) Lower to average risk equities of companies with sound financials, consistent earnings, and dividend yields above that of the S&P 500. Many securities in this category are structured with a focus on providing a consistent dividend or return of capital. Medium Risk/Growth (M/GRW) Lower to average risk equities of companies with sound financials, consistent earnings growth, the potential for long-term price appreciation, a potential dividend yield, and/or share repurchase program. High Risk/Income (H/INC) Medium to higher risk equities of companies that are structured with a focus on providing a meaningful dividend but may face less predictable earnings (or losses), more leveraged balance sheets, rapidly changing market dynamics, financial and competitive issues, higher price volatility (beta), and potential risk of principal. Securities of companies in this category may have a less predictable income stream from dividends or distributions of capital. International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

10 High Risk/Growth (H/GRW) Medium to higher risk equities of companies in fast growing and competitive industries, with less predictable earnings (or losses), more leveraged balance sheets, rapidly changing market dynamics, financial or legal issues, higher price volatility (beta), and potential risk of principal. High Risk/Speculation (H/SPEC) High risk equities of companies with a short or unprofitable operating history, limited or less predictable revenues, very high risk associated with success, significant financial or legal issues, or a substantial risk/loss of principal. Raymond James Relationship Disclosures Raymond James expects to receive or intends to seek compensation for investment banking services from the subject companies in the next three months. Company Name Becton, Dickinson and Company Disclosure Raymond James & Associates makes a market in shares of BDX. Stock Charts, Target Prices, and Valuation Methodologies Valuation Methodology: The Raymond James methodology for assigning ratings and target prices includes a number of qualitative and quantitative factors including an assessment of industry size, structure, business trends and overall attractiveness; management effectiveness; competition; visibility; financial condition, and expected total return, among other factors. These factors are subject to change depending on overall economic conditions or industry- or company-specific occurrences. Only stocks rated Strong Buy (SB1) or Outperform (MO2) have target prices and thus valuation methodologies. Target Prices: The information below indicates our target price and rating changes for BDX stock over the past three years. Valuation Methodology: Our valuation methodology is predicated on a 40%, 30%, and 30% weighting of our P/E, EV/EBITDA, and 10-year DCF driven valuation targets, respectively. Risk Factors General Risk Factors: Following are some general risk factors that pertain to the businesses of the subject companies and the projected target prices and recommendations included on Raymond James research: (1) Industry fundamentals with respect to customer demand or product / service pricing could change and adversely impact expected revenues and earnings; (2) Issues relating to major competitors or market shares or new product expectations could change investor attitudes toward the sector or this stock; (3) Unforeseen developments with respect to the management, financial condition or accounting policies or practices could alter the prospective valuation; or (4) External factors that affect the U.S. economy, interest rates, the U.S. dollar or major segments of the economy could alter investor confidence and investment prospects. International investments involve additional risks such as currency fluctuations, differing financial accounting standards, and possible political and economic instability. International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

11 Specific Investment Risks Related to the Industry or Issuer Hospital Supplies & Equipment Risk Factors Clinical Trial Results/FDA Rulings New products are a significant source of growth for most hospital supplies and equipment companies and are factored into earnings expectations. Push-back of clinical trial timelines and/or negative rulings by the FDA for new products may delay or diminish growth prospects and could result in significant decline in a stock price. Device Recalls Safety concerns or product failures may be financially material in terms of lost sales and expensive litigation issues. Reimbursement When the Centers for Medicare and Medicaid Services (CMS) lower reimbursement rates, customers (hospitals, GPOs, and IDNs) will pressure companies to lower prices for products. As prices drop, so does profitability. Without lowering prices, volume may suffer. New Technology As less invasive or less expensive technologies come onto the market, competition increases and may result in lower operating results for incumbent products. Intellectual Property Issues Most medical device companies rely on technical innovation to develop products and maintain a competitive advantage. Loss of patent protection may increase competition for a medical device company. Infringing on a competitor's patent can result in litigation expenses, royalty payments, or being forced to stop selling a product. Healthcare Reform Act The impact of the Healthcare Reform Act could have a material adverse effect on company results. Cost-containment efforts of customers, purchasing groups and governmental organizations could have a material adverse effect on sales and profitability. In an effort to reduce costs, many existing and potential customers within the United States have joined GPOs and IDNs, in an effort to negotiate lower prices through economies of scale. Further, the increasing leverage of organized buying groups may reduce market prices for products, thereby reducing industry profitability. Company-Specific Risks for Becton, Dickinson and Company Changes to top-line growth assumptions; price reductions due to hospital purchasing pressure; changes in product usage due to the US healthcare reform legislation; reductions to government reimbursement; FDA actions; product recalls; delays in new product clearance timelines; setbacks in the company's R&D initiatives; strengthening in the US dollar; competition; limited operating margin expansion; dilutive acquisitions; and adverse legal outcomes. Additional Risk and Disclosure information, as well as more information on the Raymond James rating system and suitability categories, is available at rjcapitalmarkets.com/disclosures/index. Copies of research or Raymond James summary policies relating to research analyst independence can be obtained by contacting any Raymond James & Associates or Raymond James Financial Services office (please see raymondjames.com for office locations) or by calling , toll free or sending a written request to the Equity Research Library, Raymond James & Associates, Inc., Tower 3, 6 th Floor, 880 Carillon Parkway, St. Petersburg, FL For clients in the United Kingdom: For clients of Raymond James & Associates (London Branch) and Raymond James Financial International Limited (RJFI): This document and any investment to which this document relates is intended for the sole use of the persons to whom it is addressed, being persons who are Eligible Counterparties or Professional Clients as described in the FCA rules or persons described in Articles 19(5) (Investment professionals) or 49(2) (High net worth companies, unincorporated associations etc) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) or any other person to whom this promotion may lawfully be directed. 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For clients in France: This document and any investment to which this document relates is intended for the sole use of the persons to whom it is addressed, being persons who are Eligible Counterparties or Professional Clients as described in Code Monétaire et Financier and Règlement Général de l Autorité des Marchés Financiers. It is not intended to be distributed or passed on, directly or indirectly, to any other class of International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida

12 releasable resear ch Raymond James persons and may not be relied upon by such persons and is therefore not intended for private individuals or those who would be classified as Retail Clients. For clients of Raymond James Euro Equities: Raymond James Euro Equities is authorised and regulated by the Autorité de Contrôle Prudentiel et de Résolution and the Autorité des Marchés Financiers. For institutional clients in the European Economic Area (EEA) outside of the United Kingdom: This document (and any attachments or exhibits hereto) is intended only for EEA institutional clients or others to whom it may lawfully be submitted. For Canadian clients: This report is not prepared subject to Canadian disclosure requirements, unless a Canadian analyst has contributed to the content of the report. In the case where there is Canadian analyst contribution, the report meets all applicable IIROC disclosure requirements. Proprietary Rights Notice: By accepting a copy of this report, you acknowledge and agree as follows: This report is provided to clients of Raymond James only for your personal, noncommercial use. Except as expressly authorized by Raymond James, you may not copy, reproduce, transmit, sell, display, distribute, publish, broadcast, circulate, modify, disseminate or commercially exploit the information contained in this report, in printed, electronic or any other form, in any manner, without the prior express written consent of Raymond James. You also agree not to use the information provided in this report for any unlawful purpose. This is RJA client This report and its contents are the property of Raymond James and are protected by applicable copyright, trade secret or other intellectual property laws (of the United States and other countries). United States law, 17 U.S.C. Sec.501 et seq, provides for civil and criminal penalties for copyright infringement. No copyright claimed in incorporated U.S. government works. International Headquarters: The Raymond James Financial Center 880 Carillon Parkway St. Petersburg, Florida