We recently reinstated our Neutral recommendation on
Boston Scientific Corporation
), a leading medical devices company. After several quarters of
weak performance, we are encouraged with the company's efforts at
revival, as reflected in its improved second-quarter 2013
While challenges still remain in the core stent and
defibrillators businesses, we are optimistic about the recent
update on the company's growth objective that conveys significant
The stock currently carries a Zacks Rank #2 (Buy).
Why at Neutral?
Boston Scientific reported a strong second quarter with
adjusted EPS of $0.18, beating the year-ago adjusted EPS of $0.17
as well as the Zacks Consensus Estimate of $0.16. Revenues were
up 2% at CER to $1.809 billion, ahead of the Zacks Consensus
Estimate of $1.779 billion.
The top- and the bottom-line results also exceeded the
company's guided range. Margin expansion is another upside. Based
on these encouraging numbers, BSX raised its 2013 revenue and EPS
Although Boston Scientific's result remains challenged by
headwinds in its core segments, we are encouraged by the
company's various measures to combat this challenging economic
scenario. Recently, Boston Scientific came up with significant
new additions and alterations in its growth objectives.
According to the company, the earlier growth objectives,
provided in 2010 and considered "too aggressive", required
alterations since the challenging economic scenario led to a
notable change in the end market. Accordingly, Boston Scientific
mentioned that the Interventional Cardiology (IC) and Cardiac
Rhythm Management (CRM) markets might stabilize over the next 3
years, leading to a slight improvement in sales (low single-digit
growth). Management also provided an update on its view for the
medium term (2014-2015) and the long term (2016-2017).
We believe that a fresh take on growth objectives by new
management after a period of pressurized core business will lead
to a turnaround. However, as of now, we prefer to remain on the
sidelines until further visibility is obtained in this
Other Stocks to Consider
Some of the other medical devices stocks worth a look are
Hill-Rom Holdings, Inc.
). All these stocks carry a Zacks Rank #2 (Buy).
BOSTON SCIENTIF (BSX): Free Stock Analysis
DIADEXUS INC (DDXS): Get Free Report
HILL-ROM HLDGS (HRC): Free Stock Analysis
INSYS THERAP (INSY): Free Stock Analysis
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