Barclays Maintains an 'Underweight' on Boston Scientific (BSX); 3Q Disappoints; Still a Turnaround

Barclays maintains an 'Underweight' on Boston Scientific (NYSE: BSX) price target cut by $1 to $6.00.

Barclays analyst says, "BSX continues to be challenged by multiple headwinds, most notably CRM market growth (stepped down in the quarter), elective procedure volumes, and stent pricing (down double-digits). While BSX's "cash" EPS" beat our and consensus estimate by a penny, we view the beat as low quality as revenue and margins missed expectations but EPS was helped by lighter interest expense, a lower share count, and a more favorable tax rate. The source of the revenue miss was primarily US ICDs and DES to a lesser extent, which we note are two of BSX's core, largest, highest margin businesses. On the call there were also some concerning comments about pricing and market growth as BSX's interim CEO Hank Kucheman noted that the ICD market stepped down in the quarter and said BSX made 'conscious decisions' to walk away from DES business where pricing reached 'very unattractive' levels. Net-net, we continue to view BSX as a turnaround story and would wait for more stable sales trends, execution on restructuring and cost reduction plans before getting more constructive."

For more ratings news on Boston Scientific click here and for the rating history of Boston Scientific click here.

Shares of Boston Scientific closed at $5.39 yesterday.

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