Market Overview

Amid Headline Risk, Barclays Says St. Jude's Pipeline Underestimated

Share:

Barclays believes investors are underestimating St. Jude Medical, Inc. (NYSE: STJ)’s pipeline and growth potential in future periods as it is working to close its merger with Abbott Laboratories (NYSE: ABT) in the fourth quarter.

The brokerage noted that the merger synergies are conservative and the company says the allegations of Muddy Waters/Medsec that the allegations are without merit.

“Overall, we think that STJ is a good deal for ABT and a strategic fit, and that the STJ deal close in the 4Q and improvements in STJ's results next year can catalyze ABT's stock,” analyst Matthew Taylor wrote in a note.

Meanwhile, St. Jude reported third quarter EPS of $0.99 versus consensus $1.01 on revenue of $1.499 billion, slightly above consensus of $1.497 billion. The analyst says the results are “good enough” given top-line stability and low expectations for the company headed into the quarter.

“[G]iven continued strength in Neuro and AF, and improved growth in Cardio (which grew 12%, 17%, and 7% respectively), we expect STJ's top-line growth will turn around once STJ receives MRI labels for its pacers (2H16E) and ICD's/CRT-D's (1H17E),” Taylor noted.

Taylor has an Equal-Weight rating on the stock, with a price target of $83.

At time of writing, shares of St. Jude were up 0.76 percent to $79.30.

Latest Ratings for STJ

DateFirmActionFromTo
Jul 2016DowngradesOutperformNeutral
Jul 2016DowngradesOutperformMarket Perform
May 2016DowngradesOverweightEqual-Weight

View More Analyst Ratings for STJ
View the Latest Analyst Ratings

Posted-In: Barclays Matthew Taylor Muddy WatersAnalyst Color Earnings News Short Sellers Analyst Ratings

 

Related Articles (ABT + STJ)

View Comments and Join the Discussion!
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com