Large-cap medical technologies company,
) is expanding the production of its Kangaroo ePump and the
Kangaroo Joey enteral feeding pumps and sets. Following the
announcement made by Abbott Nutrition, a division of
), to discontinue sale of all its enteral feeding pumps and sets
in North America, the company increased its inventory in the
The expansion of the Kangaroo brand under Covidien's nursing
care products should boost growth of the Medical Supplies
segment. The Medical Supplies segment has been underperforming
due to lower product sales. We believe that the exit of the
competitor will likely allow Covidien gain market share and
surpass its flat year-over-year revenue guidance for fiscal
The market leading Kangaroo enteral feeding pumps are used to
monitor the timing as well as the amount of nutrition delivered
directly into a patient's digestive tract, who is unable to
intake food orally.
The Kangaroo ePump and the Kangaroo Joey are the latest
offerings from the Kangaroo brand, which has been a trusted name
in enteral feeding for over 30 years. Both the products are
highly advanced, yet user-friendly, with subtle differences to
suit patient and care givers needs.
Covidien, with a market-cap of $27.10 billion, is a leading
global health care products company with an impressive history of
developing and manufacturing high-quality products in a
cost-effective manner. The company has a well diversified product
and technology portfolio.
However, Covidien faces stiff competition and remains exposed
to pricing, utilization headwinds along with acquisition risks.
We remain concerned about the tepid health services industry amid
a soft European economy. Also, foreign exchange translation is
expected to dampen sales growth.
We currently have a long-term 'Neutral' recommendation on the
stock, which carries a short-term Zacks #3 Rank (Hold).
ABBOTT LABS (ABT): Free Stock Analysis Report
COVIDIEN PLC (COV): Free Stock Analysis
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