Barclays on Medical Supplies & Devices: 3Q11 Review; Preliminary 2012 Outlook
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Today's Overall Ratings:
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: 3Q11 Review; Preliminary 2012 Outlook
Barclays analyst, Adam Feinstein, said, "Coming into 3Q11 results, we expected the sector to show a slight improvement sequentially, owing to easier comps, with utilization remaining under pressure. Following EPS reports of our covered medtech names, we highlight that: 1) underlying utilization trends have not improved; 2) the uptick owing to easing comps didn't fully materialize; and 3) relative to our expectations, weakness in the
US has been offset by strength OUS in most markets. While we believe that volume trends will show stability for the remainder of 2011 and into 2012, growth in most markets remains soft as multiple macro headwinds persist including, unemployment and lack of insurance coverage, rising co-pays, elective procedure delays, pricing pressure from hospitals and other payers, and payers pushback on utilization. We expect these challenges to keep a lid on valuations and we remain Neutral on the group."
"All About Riata: We think that St. Jude (NYSE: STJ) shares are reflecting a high level of concern over the potential for broader issues with the company's Riata leads and conducted a review of large amount of available data including 1) studies causing the controversy; 2) product performance reports; 3) active performance monitoring; 4) the FDA MAUDE database; 5) literature review; and 6) Medtronic's (NYSE: MDT) 2007 Fidelis recall. Based on our review, we think that the concerns around Riata are overdone."
"Hospital Update: With the goal of leveraging our combined coverage of the Health Care Facilities and Medical Devices & Supplies sectors, we provide some observations on 3Q11 hospital trends. Specifically, with its 3Q results Health Management Assoc (NYSE: HMA) indicated that volume trends remain weak in cardio (both CRM and DES) while orthopedic volumes appear to have slightly improved in the quarter. On the supply cost side, hospitals continue to see success with their supply cost initiatives and expect incremental opportunities to further reduce supply costs going forward."
Barclays analyst, Adam Feinstein, said, "Coming into 3Q11 results, we expected the sector to show a slight improvement sequentially, owing to easier comps, with utilization remaining under pressure. Following EPS reports of our covered medtech names, we highlight that: 1) underlying utilization trends have not improved; 2) the uptick owing to easing comps didn't fully materialize; and 3) relative to our expectations, weakness in the
US has been offset by strength OUS in most markets. While we believe that volume trends will show stability for the remainder of 2011 and into 2012, growth in most markets remains soft as multiple macro headwinds persist including, unemployment and lack of insurance coverage, rising co-pays, elective procedure delays, pricing pressure from hospitals and other payers, and payers pushback on utilization. We expect these challenges to keep a lid on valuations and we remain Neutral on the group."
"All About Riata: We think that St. Jude (NYSE: STJ) shares are reflecting a high level of concern over the potential for broader issues with the company's Riata leads and conducted a review of large amount of available data including 1) studies causing the controversy; 2) product performance reports; 3) active performance monitoring; 4) the FDA MAUDE database; 5) literature review; and 6) Medtronic's (NYSE: MDT) 2007 Fidelis recall. Based on our review, we think that the concerns around Riata are overdone."
"Hospital Update: With the goal of leveraging our combined coverage of the Health Care Facilities and Medical Devices & Supplies sectors, we provide some observations on 3Q11 hospital trends. Specifically, with its 3Q results Health Management Assoc (NYSE: HMA) indicated that volume trends remain weak in cardio (both CRM and DES) while orthopedic volumes appear to have slightly improved in the quarter. On the supply cost side, hospitals continue to see success with their supply cost initiatives and expect incremental opportunities to further reduce supply costs going forward."
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