Boston Scientific Gets Downgraded to Neutral By Citigroup

Jacob Harper  |

Citigroup Inc (C) downgraded Boston Scientific Corp (BSX) to “neutral” on July 9. This follows a downgrading of the medical device maker’s stock by Credit Suisse in April and a holding of a neutral rating from Zack’s in June. Analysts are concerned that the soaring stock has overstepped its potential as it trades near its three-year high. Boston Scientific has risen dramatically in 2013 on news of the products in its pipeline.

But some analysts have asserted that the stock has already factored in these developments into its current price. Matthew Dodds asserted that future sales of these devices would merely counteract the declining sales of outdated products. This is good news for medical device competitors St. Jude Medical, Inc. (STJ), Johnson & Johnson (JNJ)and Medtronic, Inc. (MDT).

Boston Scientific started their surge in 2013 following promising trials of the Watchman Left Atrial Appendage (LAA) closure device, used to treat irregular heartbeats. The device has been approved in Europe since 2005. Investors were further impressed with a four percent growth in their medical surgery, or MedSurg, division.

Emboldened by their recent success, Boston Scientific finalized a deal to buy electrophysiology company Bard EP for $275 million cash in April. This follows years of decline for Boston Scientific. In 2006 they spent $27.2 billion cash to buy Guidant, outbidding Johnson & Johnson. The deal ended up costing Boston Scientific dearly, as costy product recalls irreversibly damaged Boston Scientific’s stock. Prior to the Guidant buyout, Boston Scientific traded north of $40 a share.

Boston Scientific is down .22 percent to $9.28 a share. The Natick, Mass. company is up 61.78 percent on the year.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.


Discover: Trending Events

United Nations
Blockchain for Europe
Humanity 2.0
World Economic Forum

Watchlist

Symbol Last Price Change % Change
AAPL

     
AMZN

     
HD

     
JPM

     
IBM

     
BA

     
WMT

     
DIS

     
GOOG

     
XOM

     
BRK.A

     
FB

     
JNJ

     
WFC

     
T

     
NFLX

     
TSLA

     
V

     
UNH

     
PG