CR Bard Strong on Acquisitions, FDA Nod for Lutonix DCB - Analyst Blog

On Dec 16, we issued an updated research report on CR Bard Inc. (BCR). Recently, the FDA cleared the company's Lutonix DCB for percutaneous transluminal angioplasty (PTA) making it the first and only FDA-approved Drug-Coated Balloon (DCB) catheter in the U.S.

In our opinion, this may act as a key growth driver for the company. However, strong competition and a slack macro-economic environment persist as major headwinds.

CR Bard's initiative to introduce its products in the emerging markets is delivering accretive returns, as the company continues with its sturdy performance in the international markets. CR Bard is heavily investing in certain countries in Europe, Asia and Latin America. Japan is also deemed a major growth driver for the company.

Moreover, the settlement of the Gore litigation lawsuit in the company's favor is a material upside for CR Bard. Benefits from the proceeds will allow the company to invest in strategic mergers and acquisitions, develop new products, and leverage shareholder returns as well.

The company's business model is also benefiting from the multiple acquisitions that have been completed. In Oct 2014, the FDA approved the company's Lutonix DCB catheter. The product is expected to boost top-line growth for the company over the long run.

However, the sluggish Med-tech environment poses a concern. Government-mandated healthcare reforms in the U.S. have led to a less flexible pricing environment, which is subsequently harming growth.

In addition, CR Bard's policy of acquiring a large number of companies tends to add to the integration risks. Moreover, stiff competition from the likes of Boston Scientific Corp. (BSX), AngioDynamics Inc. (ANGO) and Johnson & Johnson (JNJ) persists over the near term.

Currently, CR Bard carries a Zacks Rank #2 (Buy).