repercussions of a federal indictment
against the former president and three
current sales managers of its Biotech division. However, Leerink Swann’s analysts
are confident the company can overcome
those challenges to outperform in 2010
and achieve a stock value of $60 per share.
Stryker was one of 22 companies highlighted in the Leerink Swann report. More
than half of the companies are expected to
outperform this year, with only eight forecast to“market perform.” One of the market performers is Medtronic Inc., the
medical device conglomerate based in
While the company has had two quarters of solid growth in Fiscal 2010, Leerink
Swann analysts believe Medtronic’s long-term growth prospects depend on the successful launch of several new products
over the next 12 to 18 months.
“Fiscal 2010 and into Fiscal 2011 repre-
sents a bit of a transition period for
Medtronic as the company must success-
fully execute on a cadence of new product
launches over the next 12-18 months in
order to drive sustainable high single-digit
to low double-digit growth longer term—
in line with management’s recent 9 percent
to 11 percent sales growth guidance over
the Fiscal 2008-Fiscal 2013 timeframe,”the
outlook stated.“We…think investors could
wait for more solid proof of successful ex-
ecution driving consistent outperformance
before shares move meaningfully higher.”
Leerink Swann analysts expect Med-
tronic’s stock to range between $45 and
$50 per share this fiscal year.
Analyst Downgrades Shares
of Boston Scientific Corp.
Having survived one of the longest and
worst recessions since the 1930s, most
medical device companies can look forward to sustained growth in 2010, many
analysts predict. The level of growth, however, is not expected to be uniform
throughout the industry.
Case in point: Shares of four medical de-
vice firms were upgraded from“neutral” to
“outperform” by an analyst with Robert W.
Baird & Co. in Milwaukee, Wis. That same
analyst downgraded shares of Boston Sci-
entific Corp.—one of the largest companies
in the industry—from“outperform”to“neu-
tral,” claiming most of the revenue gener-
ated by the Natick, Mass.-based firm comes
from sales of drug-coated stents and cardiac
rhythm products, two markets that are well-
developed and not growing very fast.