On Sep 5, 2017, we issued an updated research report on leading medical devices company, Boston Scientific Corporation (BSX - Free Report) .
Over the past three months, Boston Scientific has been trading below the broader industry on several issues. The stock has improved 2.3% compared with the broader industry’s 5.4% gain during the period.
While adverse foreign exchange continues to pose challenges, we are concerned with the company’s recall of one of its prime products, Lotus range of heart devices. It is important to note that last quarter, foreign exchange headwind affected the company’s top line by $23 million and adjusted gross margin by 50 basis points. Also, a dull defibrillator sale within core Cardiac Rhythm Management (CRM) continues to remain a drag for overall growth. The woes of challenging economy and competitive landscape persistently burden the stock.
However, given the company’s bullish second-quarter 2017 results and several recent developments, we find quite a few positive factors to rely on. The company is leaving no stone unturned to strengthen its core businesses and invest more in global markets.
Among the recent upsides, worth mentioning is the company’s acquisition of Symetis, in a bid to fortify its European structural heart business. We are also encouraged with the company securing multiple product approvals both in domestic and overseas markets. Notably, the company received an FDA approval for the RESONATE family of ICD and CRT-D systems.
Additionally, the market holds optimism on the stock, following the company’s recent release of an outline on sustained growth strategy, focusing on planned expansion in new markets and consolidating product lines across all business segments. The company particularly plans to launch products into high-growth adjacent markets with strong potential to reap an incremental $13 billion in market opportunity by 2020.
Zacks Rank & Key Picks
Boston Scientific carries a Zacks Rank #3 (Hold).
A few better-ranked medical stocks are Edwards Lifesciences Corporation (EW - Free Report) , Lantheus Holdings, Inc. (LNTH - Free Report) and IDEXX Laboratories, Inc. (IDXX - Free Report) . Edwards Lifesciences sports a Zacks Rank #1 (Strong Buy), while Lantheus Holdings and IDEXX Laboratories carry a Zacks Rank #2 (Buy). You cansee the complete list of today’s Zacks #1 Rank stocks here.
Edwards Lifesciences has a long-term expected earnings growth rate of 15.2%. The stock has surged roughly 25.9% over the last six months.
Lantheus Holdings has a long-term expected earnings growth rate of 12.5%. The stock has rallied 25.8% over the last six months.
IDEXX Laboratories has a long-term expected earnings growth rate of 19.8%. The stock has gained around 5.4% over the last six months.
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