Zacks Industry Outlook Highlights: Johnson & Johnson, Abbott Labs, Medtronic and Boston Scientific.

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For Immediate Release

Chicago, IL - October 26, 2017 - Today, Zacks Equity Research discusses the MedTech, including Johnson & Johnson JNJ , Abbott LabsABT , MedtronicMDT and Boston ScientificBSX .

Industry: MedTech, Part 2


A survey report by Gallup Analytics last month revealed that U.S. adults cited healthcare, the wider industry of medical devices, as the second major problem faced by the country under the new presidential administration. Given the current lack of clarity, let's concentrate on some powerful long-term tailwinds of the medical device industry like emerging market expansion, mergers & acquisitions (M&A), positive demographic trends and new product innovation. These have been driving the sector's impressive performance despite severe socio-economic and political instability.

Let's elaborate some of the major long-term drivers of the MedTech sector.

Emerging Market Openings

It has been seen that even considering the dull performance of the U.S. medical device market (that still holds the leading position with almost one-third of the world market share) on rising regulatory and legislative uncertainty, global growth has been strong. In 2016, this industry grew 5%, a pace last seen before the financial crisis.

And when along with the health policy debacle in the United States we also consider the worsening economic condition in Europe, we can conclude that this encouraging global growth comes mainly from the emerging markets like China, India, Latin America and others.

Going by a recent BCG report, the share of emerging markets, which is currently less than a quarter of global MedTech revenues, is likely to increase to nearly one-third of revenues by 2022. The MedTech market in China, currently the second largest in the world, is projected to grow about 13% annually from 2015 through 2022. India's MedTech market, the fifth largest in the world, is currently demonstrating 17% annual growth. If this continues, India may give good competition to Japan and Germany by 2022.

Among other emerging geographical regions, Latin America, even in the face of general economic stagnation, holds enormous potential. Per a January 2017 report by MedTech Intelligence, the Central and South American nations significantly increased per capita spending on healthcare between 2008 and 2014.

Given the huge potential in these regions, long back, Johnson & Johnson had set up manufacturing and R&D centers in Brazil, China and India. The company's medical device segment of emerging markets is growing three to four times faster than the developed markets.

Abbott Labs continues to lead the emerging market investment trend with about 50% of sales from this region. In recent quarters, sales in key emerging markets were up in double digits, driven by strength in BRIC as well as strong growth in several countries throughout Latin America, including Colombia, Mexico, Peru and Argentina.

At Medtronic , in the last-reported first quarter of fiscal 2017, businesses in China, Latin America, and Southeast Asia showed sustained strength, growing in double digits. Overall, Medtronic remains confident about its long-term outlook on emerging markets. The company is focused on developing new public and private partnerships as well as executing channel optimization strategies.

Boston Scientific 's emerging markets business registered 14% organic growth in second-quarter 2017, reflecting a significant increase from 8% growth in 2013. Business in China was once again remarkable (up 20% year over year). The company is currently looking forward to much better performance ahead in China, banking on the recent approval of SYNERGY in China.

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Johnson & Johnson (JNJ): Free Stock Analysis Report

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Boston Scientific Corporation (BSX): Free Stock Analysis Report

Medtronic PLC (MDT): Free Stock Analysis Report

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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 Nasdaq, Inc.

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

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