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Boston Scientific's Innovation & Emerging Market Raise Hope
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On Aug 31, 2016, we issued an updated research report on leading medical devices company, Boston Scientific Corporation (BSX - Free Report) . The stock currently carries a Zacks Rank #3 (Hold).
Post a mixed second-quarter 2016, we are looking forward to a better performance by Boston Scientific in the coming period on its new global restructuring plan. Notably, the company has already started to benefit from successful implementation of this plan that emphasizes on long-term growth, geographical expansion and innovation.
According to Boston Scientific, this plan will result in the fulfillment of its margin leverage goals and help produce low-to-mid-teen EPS growth, ahead of the industry average.
We have noted that 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 over the recent past. According to Boston Scientific, its Plant Network Optimization (PNO) strategy has simplified its manufacturing plant structure by shifting certain production lines among facilities. The full benefit of PNO, which has been completed recently, should start to reflect in the company’s Rhythm Management adjusted operating margin through second-half 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 second-quarter 2016, business from the emerging markets registered a robust 20% organic growth rate, well ahead of the company’s target of reaching 15% of sales by 2017 from 8% in 2013. This impressive performance was driven by 21% growth in China in the reported quarter.
Boston Scientific hopes to sustain its strong overall international performance considering 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 Cardiac Rhythm Management (CRM) sales over the recent past continue to weigh on the stock. Although, in the second quarter, it witnessed a rebound in the segment’s performance, the sustainability of this growth is still uncertain taking into consideration the disappointing performance in the company’s worldwide defibrillator sales.
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 better-ranked medical product stocks that warrant a look are Lantheus Holdings, Inc. (LNTH - Free Report) , GW Pharmaceuticals plc and Quidel Corp. (QDEL - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy).
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Boston Scientific's Innovation & Emerging Market Raise Hope
On Aug 31, 2016, we issued an updated research report on leading medical devices company, Boston Scientific Corporation (BSX - Free Report) . The stock currently carries a Zacks Rank #3 (Hold).
Post a mixed second-quarter 2016, we are looking forward to a better performance by Boston Scientific in the coming period on its new global restructuring plan. Notably, the company has already started to benefit from successful implementation of this plan that emphasizes on long-term growth, geographical expansion and innovation.
According to Boston Scientific, this plan will result in the fulfillment of its margin leverage goals and help produce low-to-mid-teen EPS growth, ahead of the industry average.
We have noted that 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 over the recent past. According to Boston Scientific, its Plant Network Optimization (PNO) strategy has simplified its manufacturing plant structure by shifting certain production lines among facilities. The full benefit of PNO, which has been completed recently, should start to reflect in the company’s Rhythm Management adjusted operating margin through second-half 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 second-quarter 2016, business from the emerging markets registered a robust 20% organic growth rate, well ahead of the company’s target of reaching 15% of sales by 2017 from 8% in 2013. This impressive performance was driven by 21% growth in China in the reported quarter.
Boston Scientific hopes to sustain its strong overall international performance considering 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 Cardiac Rhythm Management (CRM) sales over the recent past continue to weigh on the stock. Although, in the second quarter, it witnessed a rebound in the segment’s performance, the sustainability of this growth is still uncertain taking into consideration the disappointing performance in the company’s worldwide defibrillator sales.
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 better-ranked medical product stocks that warrant a look are Lantheus Holdings, Inc. (LNTH - Free Report) , GW Pharmaceuticals plc and Quidel Corp. (QDEL - Free Report) . All three stocks sport a Zacks Rank #1 (Strong Buy).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>