Stifel Reiterates Buy on Boston Scientific (BSX) After Hosting Investor Day with Management

Stifel reiterated a Buy rating and $22.00 price target on Boston Scientific (NYSE: BSX) after hosting an investor day with management. For 2016, management reaffirmed their expectation to open and train 100 additional centers. Management repeatedly emphasized that methodically rolling out Watchman remains paramount to generating positive clinical outcomes and clinician expertise/technique. For the US, management anticipates commercializing Lotus towards the end of 2017. This timing suggests a modestly accelerated launch timeline vs. prior commentary suggesting a late 2017/early 2018 launch.

Analyst Rick Wise commented, "Last week in NYC, we hosted a day of investor meetings with Boston Scientific CEO Michael Mahoney, CFO Daniel Brennan and VP/IR Susie Lisa. Our meetings with senior management reinforced our view that BSX has made truly significant strides: 1) organically and through M&A, broadly re-invigorating the company’s product portfolio – from a completely “refreshed” CRM product offering to the addition of Endo Pharmaceutical Men’s Health. This, in turn, has re-accelerated sales growth from flat-to-down, to now four quarters of consistent mid-to-high SDs. And, we see potential for this upper-tier MedTech growth rate to remain sustainable as the new BSX product pipeline only just now seems poised to gain traction; and 2) since the arrival of new CEO Mike Mahoney, five-plus years ago, BSX has deftly balanced cost-savings initiatives and re-investment, driving ~400bps of EBITA margin expansion. Looking ahead, with a now seemingly “right-sized” infrastructure and arguably the most impressive MedTech product pipeline, BSX’s profitability profile would seem to have significant room for further improvement. Underscoring the still yet to be realized top-line and margin opportunities, key investor meeting highlights included: (i) the company’s ongoing passionate commitment to drive industry leading, top-tier revenue growth performance, (ii) multiple approaches to further enhance the company's margin profile with definitive margin expansion targets out to 2020; and (iii) clear excitement on recent/soon-to-be product launches (Watchman, Synergy, Lotus, Spyglass DS) across multiple franchises and geographies which should accelerate top-line growth with improved margins. As well, at ACC 2016, BSX hosted an analyst meeting with key senior members of the company’s cardiology businesses. This event highlighted multiple long-tailed growth opportunities specific to the Cardiovascular franchise. Below we discuss key takeaways from both events. We rate BSX shares as Buy with a $22 target price."

For an analyst ratings summary and ratings history on Boston Scientific click here. For more ratings news on Boston Scientific click here.

Shares of Boston Scientific closed at $19.17 yesterday.

You May Also Be Interested In

• Stifel Upgrades Barry Callebaut AG (BARN:SW) (BYCBF) to Buy
• Itau BBA Reiterates Outperform Rating on JBS SA (JBSS3:BZ) (JBSAY)
• Boston Scientific (BSX) PT Raised to $79 at Truist Securities