On Jun 13, 2016, we issued an updated research report on leading medical devices company, Boston Scientific Corporation (BSX Quick QuoteBSX - Free Report) . The stock currently carries a Zacks Rank #2 (Buy).

Shares of Boston Scientific hit a 10-year high last week following the announcement of its global restructuring plan, the execution of which will result in the fulfillment of its margin leverage goals and help produce low-to-mid-teens EPS growth, ahead of the industry average.

Without revealing much detail, the company noted that the program will focus on developing global commercialization, technology and manufacturing capabilities in key growth markets, continuing implementation of its Plant Network Optimization (PNO) strategy, and expanding operational efficiencies to support its operating income margin goals.

Management has chalked out several key activities under the program, which include strengthening global infrastructure through evolving global real estate and workplaces, developing global commercial and technical competencies, enhancing manufacturing and distribution expertise in certain regions, and continuing implementation of the company's ongoing PNO strategy. This strategy is intended to simplify Boston Scientific's manufacturing plant structure by transferring certain production lines among facilities. These activities are expected to be initiated in the second quarter of 2016 and substantially completed by year-end 2018.

We note that despite challenging economic conditions, a competitive environment and severe currency headwinds, Boston Scientific managed to post a better-than-expected first-quarter 2016, with respect to both earnings and revenues.

The company continues to strengthen its core businesses and invest in new technologies and global markets, which accounted for the sales upside across most of its businesses and regions in the reported quarter. According to Boston Scientific, its PNO strategy has simplified its manufacturing plant structure by shifting certain production lines among facilities. The full benefit of PNO, which has been completed lately, should start to reflect in the company’s Rhythm Management adjusted operating margin through the second half of 2016.

An important aspect of the company’s growth strategy is to continue pursuing development opportunities outside the U.S. by expanding global presence, inclusive of the emerging markets. In the first quarter of 2016, business from the emerging markets registered a robust 21% organic growth rate, ahead of the company’s target of reaching 15% of sales by 2017 from 8% in 2013.

Boston Scientific hopes to sustain its strong overall international performance taking into consideration several key new product launches that are in the early stages of their rollout. The company is also optimistic about its core cardiology segment which is gradually stabilizing, with growth witnessed in the BRIC nations.

Meanwhile, sluggish CRM sales over the recent past continue to weigh on the stock. Although Boston Scientific currently expects a rebound in its CRM performance in the second quarter and second-half 2016, we remain on the sidelines based on the challenges still being faced in this business, especially in the U.S.

Nevertheless, Boston Scientific has a strong pipeline of products under development, the launch of which should drive the top line, going ahead.

Key Picks in the Sector

Some other well-ranked medical product stocks that warrant a look include Baxter International Inc. (BAX Quick QuoteBAX - Free Report) , LeMaitre Vascular, Inc. (LMAT Quick QuoteLMAT - Free Report) and ICU Medical, Inc. (ICUI Quick QuoteICUI - Free Report) . All three stocks hold the same Zacks Rank as Boston Scientific.

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