Wells Fargo Upgrades St. Jude Medical (STJ) to Outperform; Benefit From Share Gains in ICD Market

August 26, 2009 8:10 AM EDT

Wells Fargo upgrades St. Jude Medical, Inc. (NYSE: STJ) to Outperform. Valuation Range increased to $43-$45 from $38-$40.

Wells analyst says, "Our thesis on STJ is based upon (1) our expectation that the ICD market will accelerate in 2010 and STJ has the highest exposure to ICDs among the three major players (34% of total sales); (2) EPS growth should accelerate in 2010 as currency turns positive (STJ does not hedge on the P&L); and (3) valuation is compelling as STJ is trading at its largest discount to the S&P 500 in five years and the lowest PEG ratio among the three ICD manufacturers. Although some investors viewed STJ's recent headcount reduction on August 18 as a bearish sign, we note that the stock outperformed the S&P 500 12 months following the previous headcount reduction in August 2006."

To see more analyst ratings on STJ Click Here.

St. Jude Medical, Inc. develops, manufactures, and distributes cardiovascular and implantable neurostimulation medical devices worldwide.

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