On Sept 5 the Journal of Allergy and Clinical Immunology released data that showed the Alair Bronchial Thermoplasty (BT) System, an asthma treatment device manufactured by Boston Scientific Corporation (BSX) , is “safe and effective,” concluding a five-year study of the device. Boston Scientific’s stock shot up on the positive review, adding to an already triumphant year for the once-troubled healthcare company.
The journal findings concerning the BT System follow a series of successes of continual successes for the company’s products in 2013, even as analysts have remained skeptical of the company. In April, Credit Suisse downgraded Boston despite a strong first quarter. In May, Boston’s stock jumped 11 percent on a positive four-year follow up on their Watchman Left Atrial Appendage (LAA) closure device.
Then in July Citigroup (C) downgraded the stock as well. Following this downgrade, on July 25 Boston issued their second quarter 2013 earnings report crushing expectations.The company was spurred on by robust sales of both older devices and surprising successes in their neuromodulation devices and sending the stock soaring once more.
Boston is still recovering from the disastrous $27.2 billion purchase of device maker Guidant in 2006. The move turned out to be a major blow to the company, forcing them to issue a major write-down amid lawsuits and recalls associated iwth Guidant products. Boston had already lost half its value at that point, and the slide continued. Since 2004, Boston has lost three-quarters of their market cap.
After languishing in 2011 and 2012, the company is rebounding in 2013. But sespite being the sixth-best performing stock in the S&P 500 this year, and the string of sucesses for its new devices, analysts are still wary of Boston. Of 18 analysts polled by NASDAQ, 14 have a “hold” rating on the stock, with four assigning a “strong buy.”
However, that trend may be finally reversing. Barclays Capital reiterated their “overweight” rating on the stock on Aug. 14, and has a price target of $12 a share. On Sept 4 Credit Suisse raised their price target on Boston from $11 a share to $12.
Natick, Mass.-headquartered Boston Scientific was up 6.68 percent on the day to hit $11.66 a share. They are up a whopping 85.57 percent on the year.
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