St. Jude Medical Raised to Buy - Analyst Blog

On Mar 25, Zacks Investment Research upgraded St. Jude Medical Inc. STJ to a Zacks Rank #2 (Buy) from a Zacks Rank #3 (Hold).

Why the Upgrade?

This global medical device company has been witnessing rising earning estimates over the last one month on the back of strong fourth-quarter 2013 results, released on Jan 22. Most recently, St. Jude Medical has been riding on a wave of global launches as well as the U.S. Food and Drug Administration (FDA) and CE Mark approvals for its new products.

On Mar 24, St. Jude Medical announced the global launch of its Optisure Defibrillation Lead, an addition to the company's existing high-voltage product portfolio. The Optisure lead has been approved by the FDA, European CE Mark, Health Canada, Therapeutic Goods Administration TGA in Australia and the Japanese Ministry of Health, Labor and Welfare (MHLW).

On the same day, the company announced FDA approvals of its new pacemakers – the Allure Quadra Cardiac Resynchronization Therapy pacemaker, the Assurity pacemaker and Endurity pacemaker families of devices. St. Jude Medical intends to launch these products in the U.S. by the end of first-quarter 2014.

The company also announced its receipt of CE Mark Approval and the subsequent European launch of its Prodigy Chronic Pain System with Burst Technology on Mar 20.

St. Jude Medical's fourth-quarter results topped estimates on both fronts. While adjusted net earnings per share grew 7.6% to 99 cents, revenues improved 3.6% to $1,422 million for the quarter. Both earnings and revenues exceeded the Zacks Consensus Estimate by 3 cents and $41 million, respectively.

Over the last 30 days, St. Jude Medical saw one upward estimate revision for fiscal 2014 with no downward revision over the same time frame. The Zacks Consensus Estimate, however, remained flat at its current level of $3.98. The company delivered positive earnings surprises in all of the last four quarters with an average beat of 2.1%.

Other Stocks to Consider  

Some other stocks worth considering in the medical products industry include Enzymotec Ltd. ENZY, Baxter International Inc. BAX and Covidien plc COV. While Enzymotec enjoys a Zacks Rank #1 (Strong Buy), both Baxter International and Covidien hold a Zacks Rank #2 (Buy).