Market Overview

Morgan Stanley Upgrades Boston Scientific on Pipeline Acceleration

Related BSX
Boston Scientific Initiates Global Study To Assess EMBLEM Subcutaneous Implantable Defibrillator In Primary Prevention Patients With Low Ejection Fraction
New Data Demonstrate Greater Pain Relief With Boston Scientific Precision Spectra™ Spinal Cord Stimulator System

In a report published Monday, Morgan Stanley analyst David Lewis upgraded Boston Scientific (NYSE: BSX) from Equal-weight to Overweight based on pipeline acceleration traction.

Despite disappointing pipeline progress in 2013 from Asthmatx reimbursement delays and S-ICD manufacturing constraints, Morgan Stanley expects sales results to improve. Morgan Stanley's updated model shows risk-adjusted pipeline sales of $90 million (130 bps) in 2014 and $145 million (180 bps) in 2015, which drives a $0.07 (8%) EPS accretion by 2015.

Lewis reported that Boston Scientific has the best opportunity for margin improvements in cardiology. The analyst commented, “At 19%, cash operating margins are depressed relative to peers. In particular, CRM margins of 12-13% are half those of competitors; normalizing CRM profitability alone could drive 15%+ upside to EPS over several years. Structural cost programs have done an impressive job of supporting the P&L during a multi-year contraction in revenue, but margin results should accelerate in a more visible way as revenue growth rates push into the mid single digits and drive much better leverage over a fully-loaded expense structure.”

Shares of Boston Scientific Corporation closed at $11.93 on Friday and is currently trading at $12.28, up 2.93%.

Latest Ratings for BSX

Apr 2015BarclaysMaintainsOverweight
Apr 2015Leerink SwannMaintainsOutperform
Apr 2015RBC CapitalMaintainsOutperform

View More Analyst Ratings for BSX
View the Latest Analyst Ratings

Posted-In: David Lewis Morgan StanleyAnalyst Color Upgrades Analyst Ratings


Related Articles (BSX)

Around the Web, We're Loving...

Get Benzinga's Newsletters