On Dec 27 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 #4 (Sell).
Boston Scientific traded neck and neck with S&P 500 index over the past six months, until it delivered unimpressive third-quarter 2016 results. Unfavorable currency movement has been a major dampener during the quarter. Despite a raised 2016 guidance, the company’s share price has fallen further on account of certain product halt in late October. Accordingly, per the last share price movement, overall the company lost 77%, as against a 12.91% gain of the index over the last six months.
Sluggish CRM sales over the recent past also continue to weigh on Boston Scientific's results. Although, in the third quarter, the company witnessed a rebound in the segment’s performance, the sustainability of this growth is still doubtful given the disappointing performance in the company’s worldwide defibrillator sales. Strong competitors in the large medical device market also pose a tough challenge for Boston Scientific.
On a positive note, backed by a strong global team and perfect execution of long-term strategic plans the company posted 9% organic growth. We believe, Boston Scientific will overcome the hiccups with its efforts to strengthen core businesses and invest in new technologies and markets. The company’s Urology business is also gaining traction. However foreign exchange and competition are the main concerns.
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.
An important part 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. 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.
Some better-ranked medical stocks include NxStage Medical Inc. , Baxter International Inc. (BAX - Free Report) and Bovie Medical Corporation . NxStage Medical and Baxter International sport a Zacks Rank #1 (Strong Buy) while Bovie Medical carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
NxStage Medical gained 14.0% over the last one year compared to the S&P 500’s 9.7% growth. The company has a four-quarter average positive earnings surprise of 46.3%.
Baxter International rallied 15.7% over the last one year, much higher than the S&P 500. It has a trailing four-quarter average positive earnings surprise of 27%
Bovie Medical recorded a 95.9% gain in the past one year, way better than the S&P 500. The company has a trailing four-quarter positive average earnings surprise of 28.7%.
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