Barclays on Medical Supplies & Devices: 3Q Preview: No Bounce Back in Sight
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Up: 8 | Down: 5 | New: 26
Rating Summary:
3 Buy, 21 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Barclays on Medical Supplies & Devices: 3Q Preview: No Bounce Back in Sight
Barclays analyst, Adam Feinstein, said, "We expect 3Q11 results for the sector to show a slight improvement sequentially, owing to easier comps, but we highlight that utilization remains under pressure and do not expect a 2H bounce-back. Comps begin to ease this quarter as the market laps a drop-off in US insurance coverage that impacted volumes in 3Q10 given the roll-off of COBRA subsidies last year. We believe that volume trends will show stability through the back half of 2H11 and into 2012, though growth in most markets remains soft as multiple macro headwinds persist: 1) unemployment and lack of insurance coverage; 2) rising co-pays; 3) elective procedure delays; 4) pricing pressure from hospitals and other payers; and 5) payers pushback on utilization. Given these challenges, we remain neutral on the group."
"St. Jude's (NYSE: STJ) EPS Preview: Heading into STJ's 3Q EPS report on October 19th, we believe there are multiple overhangs, including issues relating to the company's Riata lead, concerns that 3Q results (especially in CRM) will come in light versus expectations, uncertainty around Quadra timing, and expectations that STJ could lower 2011 guidance."
"Hospital Commentary: We highlight that hospital comments, most notably HCA Inc (NYSE: HCA) and Tenet Healthcare (NYSE: THC), continue to point to weak procedural volumes in several medtech markets, especially cardio (i.e. CRM and DES). These comments are consistent with what we have heard from our medtech companies. Going forward, we expect continued uncertainty around revenue growth amid weak utilization and a challenging pricing environment to keep a lid on valuations."
Barclays analyst, Adam Feinstein, said, "We expect 3Q11 results for the sector to show a slight improvement sequentially, owing to easier comps, but we highlight that utilization remains under pressure and do not expect a 2H bounce-back. Comps begin to ease this quarter as the market laps a drop-off in US insurance coverage that impacted volumes in 3Q10 given the roll-off of COBRA subsidies last year. We believe that volume trends will show stability through the back half of 2H11 and into 2012, though growth in most markets remains soft as multiple macro headwinds persist: 1) unemployment and lack of insurance coverage; 2) rising co-pays; 3) elective procedure delays; 4) pricing pressure from hospitals and other payers; and 5) payers pushback on utilization. Given these challenges, we remain neutral on the group."
"St. Jude's (NYSE: STJ) EPS Preview: Heading into STJ's 3Q EPS report on October 19th, we believe there are multiple overhangs, including issues relating to the company's Riata lead, concerns that 3Q results (especially in CRM) will come in light versus expectations, uncertainty around Quadra timing, and expectations that STJ could lower 2011 guidance."
"Hospital Commentary: We highlight that hospital comments, most notably HCA Inc (NYSE: HCA) and Tenet Healthcare (NYSE: THC), continue to point to weak procedural volumes in several medtech markets, especially cardio (i.e. CRM and DES). These comments are consistent with what we have heard from our medtech companies. Going forward, we expect continued uncertainty around revenue growth amid weak utilization and a challenging pricing environment to keep a lid on valuations."
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