Needham says Boston Scientific is strong across all areas, even in an area that a competitor wants to gain market share. Analyst Mike Matson raised Boston Scientific’s buy rating to hold. He stated in a note sent to clients that the company produces a medical device and should continue to be a strong seller, despite competition from Abbott Laboratories. This device is known as watchman and can help reduce stroke risk for patients who have irregular heartbeats. WATCHMAN sales are now reported by BSX on a quarterly basis. Matson stated, “While management claims that the change is due to restructuring its reporting segments and not a sign that it’s bullishly motivated,” Matson said. Needham said that even though Abbott’s product is growing in market share Boston Scientific should still be able offset it with its strength elsewhere. Matson stated that he had done a sensitivity assessment of BSX revenue growth relative to WATCHMAN. He believes 1) BSX can sustain single-digit organic growth even if WATCHMAN grows slowly; 2) BSX should at least partially offset WATCHMAN slow growth by leveraging upside from other products.” Needham also stated that Boston Scientific might be an attractive target for a buyout if there is more merger and acquisition activity within the health care sector. This would provide shareholders with upside. Needham has set a $48 price target for Boston Scientific. This is almost 20% higher than the closing price of Thursday’s stock. — CNBC’s Michael Bloom contributed to this report.
