Wells Fargo Downgrades Boston Scientific (BSX) to Market Perform; Lowers EPS Estimates
BSX Hot Sheet
Rating Summary:6 Buy, 13 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 16 | Down: 7 | New: 23
Wells Fargo downgrades Boston Scientific (NYSE: BSX) from Outperform to Market Perform. Valuation range lowered to $9-$10 from $11-$12.
Wells analyst says, "We are downgrading BSX to Market Perform due to the growing number of headwinds facing its key end markets as well as its market share position. This was evident in the disappointing Q3 earnings and Q4 guidance the company reported after the close on Monday. We are lowering our adjusted 2009 EPS estimate to $0.79 from $0.83 and our 2010 EPS estimate to $0.88 from $0.92. Our new valuation range of $9-$10 (from $11-$12) assumes 11x our new 2010 EPS estimate.
"The growth rates in BSX’s key end markets, drug eluting stents (DES) and cardiac rhythm management (CRM), are decelerating and we expect BSX’s DES market share to erode over the next few quarters due to the negative Taxus clinical data at TCT last month. JNJ (NYSE: JNJ) indicated on its Q3 call last week that the U.S. DES market declined 7% in Q3 versus 8% growth in Q2. In addition, BSX’s w/w DES share declined by about 100bps sequentially to 41% in Q3, however, the change in the mix of Taxus and Promus likely had a negative impact on BSX’s margins in the quarter and we expect this trend to continue through most of 2010."
To see more analyst ratings on BSX Click Here.
Wells analyst says, "We are downgrading BSX to Market Perform due to the growing number of headwinds facing its key end markets as well as its market share position. This was evident in the disappointing Q3 earnings and Q4 guidance the company reported after the close on Monday. We are lowering our adjusted 2009 EPS estimate to $0.79 from $0.83 and our 2010 EPS estimate to $0.88 from $0.92. Our new valuation range of $9-$10 (from $11-$12) assumes 11x our new 2010 EPS estimate.
"The growth rates in BSX’s key end markets, drug eluting stents (DES) and cardiac rhythm management (CRM), are decelerating and we expect BSX’s DES market share to erode over the next few quarters due to the negative Taxus clinical data at TCT last month. JNJ (NYSE: JNJ) indicated on its Q3 call last week that the U.S. DES market declined 7% in Q3 versus 8% growth in Q2. In addition, BSX’s w/w DES share declined by about 100bps sequentially to 41% in Q3, however, the change in the mix of Taxus and Promus likely had a negative impact on BSX’s margins in the quarter and we expect this trend to continue through most of 2010."
To see more analyst ratings on BSX Click Here.
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