St. Jude Medical Inc. (STJ): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
St. Jude's preliminary fourth-quarter 2014 results reflect strong momentum at the company's CardioMEMS technology and Atrial Fibrillation business. Most of the segments are expected to report within or above the company's previously issued guidance, which is a positive in our view. We note that the company's top line incorporates a considerable negative impact from recent foreign currency movements. In fact, U.S. manufacturers such as St. Jude that generate a significant portion of their revenues from overseas are being hurt by a strengthening U.S. dollar, which has benefited from more upbeat U.S. economic prospects compared to the rest of the world. We feel that the strong U.S. dollar which is impacting the company's revenues will also hurt its bottom line. Nevertheless, an expanding and innovative product portfolio, accretive acquisitions and aggressive share buyback programs will drive growth in 2015 and beyond. Considering these factors, we maintain Neutral recommendation and set a target price of $70.00.


Overview:

Headquartered in St. Paul, MN, St. Jude Medical Inc. (STJ) is a leading global manufacturer and distributor of innovative cardiovascular and implantable neurostimulation medical devices.

St. Jude reported net sales of $5.5 billion in 2013. In the nine months ended Sep 27, 2014, sales increased 2.5% year over year to $4.18 billion. U.S. revenues grew 1.2% to $2 billion while international revenues scaled 3.8% to $2.2 billion.

On Jan 28, 2014, St. Jude announced consolidation of two of its operating divisions Implantable Electronic Systems Division (IESD) and Cardiovascular & Ablation Technologies Division (CATD) -- into a single operating unit, which derives revenues from six principal product categories. The integration has been conducted in a phased approach in 2014.

The company's six principal product categories are as follows:

Tachycardia Implantable Cardioverter Defibrillator (ICD) systems (31.6% of total revenues in the first nine months of 2014)

Bradycardia pacemaker (pacemaker) systems (18.8%)

Atrial Fibrillation (AF) products (18.2%)

Vascular products (12.5%)

Structural Heart products (11.5%)

Neuromodulation products (7.4%)


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.




This article appears in: Investing , Stocks

Referenced Stocks: STJ , ICD , AF

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