On Jan 2, 2018, we issued an updated research report on leading medical devices company, Boston Scientific Corporation BSX. The stock carries a Zacks Rank #3 (Hold).
Over the past three months, Boston Scientific has been trading below the broader industry on several issues. The stock has declined 13.5% compared with the broader industry's 3.9% gain during the period.
On a positive note, a gradually improving foreign exchange scenario has also started to contribute to the company’s overall top-line performance. The raised guidance is all the more impressive and indicative of this overall bullish trend to continue through the rest of 2017 til the company reports its final quarter’s earnings performance.
Boston Scientific is leaving no stone unturned to strengthen its core businesses and invest in new technologies and global markets, which accounted for higher sales across all its geographies in the third quarter. We are also encouraged by the company’s gain of a number of approvals for its products both in the domestic as well as overseas markets.
Among the recent developments, worth mentioning is the company's recent acquisition of Apama Medical, the developer of the single-shot Apama Radiofrequency Balloon Catheter System for the treatment of atrial fibrillation. This apart, the company received an FDA approval for MRI labeling and announced the U.S. launch of the Resonate family of implantable cardioverter defibrillator and cardiac resynchronization therapy defibrillator (CRT-D) systems. This combines the HeartLogic Heart Failure Diagnostic, EnduraLife battery technology and SmartCRT Technology.
However, we are concerned about the company’s recall of one of its prime products, Lotus range of heart devices. Recently, the company announces a delay in its earlier-reported timelines for the commercial return of the LOTUS Edge Aortic Valve System in Europe and the United States, following the product’s voluntary recall that took place in last February.
On the upcoming fourth-quarter 2017 earnings conference call, scheduled on Feb 1, 2018, the company now expects to provide a further update on the status of the LOTUS Edge Valve.
Also, a dull defibrillator sale within the core Cardiac Rhythm Management continues to be a drag for overall growth. Additionally, the woes of a challenging economy as well as a competitive landscape persistently burden the stock.
Key Picks
Some better-ranked stocks from the broader medical space are Akari Therapeutics PLC. AKTX, Protagonist Therapeutics Inc. PTGX and XOMA Corp. XOMA, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Akari has a projected growth rate of 88.89% for the next quarter. The earnings surprises delivered by the company have been positive in the last three quarters with an average beat of 88.6%.
Protagonist has an expected earnings growth rate of 36.9% in 2017. The stock has soared an impressive 80.6% in the last six months.
XOMA is expected to score an impressive earnings growth rate of 99.2% in 2017. The stock has skyrocketed a whopping 406.4% in the last 6 months, despite a loss of 1.7% incurred by the broader industry.
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