The Zacks Analyst Blog Highlights: Boston Scientific, Abbott Laboratories, Cyberonics, Given Imaging and Aflac
CHICAGO, March 14, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Boston Scientific (NYSE: BSX), Abbott Laboratories (NYSE: ABT), Cyberonics Inc. (Nasdaq: CYBX), Given Imaging. (Nasdaq: GIVN) and Aflac Inc. (NYSE: AFL).
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Here are highlights from Wednesday's Analyst Blog:
BSX Stent Tops Abbott's
Boston Scientific's (NYSE: BSX) recently released endpoint data of a clinical trial showed the impressive results of the company's Promus Element Everolimus-Eluting Platinum Chromium (PtCr) Coronary Stent System over its major peer Abbott Laboratories' (NYSE: ABT) Cobalt Chromium (CoCr) Xience V Everolimus-Eluting Coronary Stent System.
This was a huge achievement for BSX. The data, which was tracked for a period of three years, was presented in the American College of Cardiology in San Francisco. The report reflects the efficiency of Promus Element over Abbott's Xience V over that period of time.
The 3-year trial reported a 3.5% target lesion revascularization (TLR) rate for the Promus Element Stent, compared to 4.9% for the Xience V Stent. Moreover, keeping at par with the company's earlier data, the trial result portrayed that unplanned stenting has been significantly reduced with Promus Element compared to Xience V including a significantly lower rate of inadequate lesion coverage. A separate data showed improved blood flow through Promus Element as it has less vessel straightening characteristics compared to Xience V.
The drug-eluting stent business in the U.S. continues to witness challenges of pricing pressure, lower procedural volume and lower penetration rates. Global sales of the coronary stent system (within Interventional Cardiology) declined 12.6% to $333 million. The downside was due to disappointing performances of the drug-eluting stents that declined 12.4% to $312 million and the bare-metal stents that plunged 16% to $21 million.
However, Boston Scientific is resorting to all available means to return to growth. The company has a strong pipeline of products under development, the launch of which should drive the top line. Last month, BSX received CE Mark approval for the Promus PREMIER Everolimus-Eluting Platinum Chromium Coronary Stent System. Subsequent to the approval, the company has been working on the European market launch of this next-generation durable polymer drug-eluting stent.
We also note that Boston Scientific is striving to penetrate the emerging markets, including India, Brazil and China, with its Element platform. The company expects this to continue to accelerate growth through the end of the current fiscal. We expect these factors to benefit the company over the long term. With approximately 4 million people across the world suffering from cardiovascular disease and being treated with stents, Boston Scientific is optimistic about delivering better numbers in the upcoming quarters.
Boston Scientific now carries a Zacks Rank #3 (Hold). Other medical device stocks worth a look are Cyberonics Inc. (Nasdaq: CYBX) and Given Imaging. (Nasdaq: GIVN). Both the stocks carry a Zacks Rank #1 (Strong Buy).
Aflac Downgraded to Strong Sell
On Mar 12, the Zacks Investment Research downgraded Aflac Inc. (NYSE: AFL) to a Zacks Rank #5 (Strong Sell).
Why the downgrade?
Aflac has witnessed sharp downward estimate revisions after reporting disappointing fourth-quarter and full-year 2012 results. Shares of this life and health insurer are likely to continue fluctuating given the absence of any major growth catalyst in the near future.
On Feb 5, Aflac reported fourth-quarter 2012 operating earnings per share of $1.48, which came in line with the Zacks Consensus Estimate and were slightly ahead of $1.45 recorded in the year-ago quarter.
However, total revenue of $6.38 billion fell short of the Zacks Consensus Estimate of $6.61 billion, although it rose 6.6% from the prior-year period. An unfavorable dollar/yen exchange rate and the low-rate environment marred most of the upside.
Alongside, higher operating expenses and strong sales of low-margin general health products in Japan have moderated the improvement in benefit ratio, which adversely affects the margins.
Further, Aflac's indulgence in de-risking activities has shifted its portfolio toward investments with less risk and lower yields, which will further lessen investment income. Management's guidance also reflects difficult comps and continuation of the sluggish growth period in 2013.
The Zacks Consensus Estimate for 2013 decreased 6.0% to $6.39 per share over the last 60 days, with all 14 estimates being revised downward. For 2014, 7 of 17 estimates were revised downward, over the last 60 days, sinking the Zacks Consensus Estimate by 4.8% to $6.91 per share. No upward revisions have been witnessed for both the years.
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