On Sep 17, Zacks Investment Research raised
St. Jude Medical Inc.
) to a Zacks Rank #2 (Buy).
Why the Upgrade?
The recent flurry of activities such as the CE Mark approval of
the second generation of EnligHTN, acquisition of Endosense, and
U.S. Food and Drug Administration (FDA) approval for
Mediguide-enabled ablation catheters, as well as the FDA's
decision to review CardioMEMS' Champion offering have managed to
boost investors' confidence for St. Jude. Moreover, this medical
device giant has been witnessing rising estimates on the back of
strong second-quarter results and raised guidance for 2013.
On an encouraging note, the company's Cardiovascular division
received a significant boost on Aug 29, with the CE Mark approval
for its next-generation EnligHTN Renal Denervation System. With
only 4% penetration rate, the device has a huge market
opportunity worth roughly $30 billion.
Additionally, on Sep 6, an FDA committee announced that it will
discuss information related to the pre-market approval
application next month for privately-held cardiac devices company
CardioMEMS' Champion Hear Failure (HF) Monitoring device. St.
Jude has a 19% stake in the company and has agreed to acquire it
on successful completion of a significant milestone.
The second round of review by the FDA advisory committee
should yield positive results, given the initial failure of the
Champion device to win regulatory approval in 2011.
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On Aug 19, the company's AF division acquired Switzerland-based
Endosense to expand its product base in both the international
and U.S. markets. Endosense is the first to develop a
force-sensing technology - TactiCath ablation catheter - to
measure the amount of force applied to the heart wall during a
catheter ablation procedure.
Further on, the AF division received the U.S. Food and Drug
Administration (FDA) approval for its latest MediGuide Enabled
Ablation Catheters. St. Jude considers the MediGuide technology
to be the most important growth driver for its AF products
St. Jude's second-quarter adjusted earnings per share of 96 cents
beat the Zacks Consensus Estimate of 94 cents, and transcended
the year-ago earnings by 9.1%. Revenues grew 2% in constant
currency to $1,403 million, comfortably exceeding the Zacks
Consensus Estimate of $1,364 million. Based on its progress, STJ
raised the bottom end of its adjusted earnings for 2013 to
$3.70-$3.73 from the earlier band of $3.68-$3.73.
The Zacks Consensus Estimate for 2013 increased 0.3% to $3.73 per
share over the last 60 days. The Estimate for 2014 also increased
0.3% to $3.97 over the same period.
Other Stocks to Consider
Other medical stocks worth considering are
), with a Zacks Rank #1 (Strong Buy), and
), both carrying a Zacks Rank #2 (Buy).