St. Jude Reiterated at Neutral - Analyst Blog
May 10 2013 - 11:20AM
Zacks
On May 9, we retained St.
Jude Medical Inc. (STJ) at Neutral, following its
first-quarter results. In spite of a declining top line due to
difficult end-market pressures, the company was able to maintain
its bottom-line growth.
Why the Retention?
On Apr 17, St. Jude posted first-quarter 2013 adjusted earnings per
share of 92 cents, which was in line with the Zacks Consensus
Estimate. It transcended the year-ago earnings by 7%. Revenues
dropped 4% (down 3% in constant currency) year over year to $1,338
million and missed the Zacks Consensus Estimate of $1,368
million.
The company’s earnings have managed to beat the Zacks Consensus
Estimate in 3 out of the last 4 quarters with an average surprise
of 1.95%. It managed to meet the Zacks Consensus Estimate in the
last reported quarter. Following the earnings release, the Zacks
Consensus Estimate for 2013 and 2014 remained unchanged at $3.70
and $3.95, respectively.
St. Jude’s declining top line with all segments reporting
disappointing results (except the Atrial Fibrillation segment)
remains a cause of concern. The core Cardiac Rhythm Management
(CRM) division continues to face multiple headwinds. We remain
cautious about increased competition, pricing pressure, softness in
CRM and cardiovascular sales along with currency fluctuations.
However, management is confident that new products in 2013 will
drive long-term growth for the company. We are also encouraged with
St. Jude’s restructuring and cost saving measures, which are
helping to maintain the bottom line.
Other Stocks to Consider
St. Jude has a Zacks Rank #3 (Hold). While we remain on the
sidelines regarding STJ, medical stocks such as
Conceptus (CPTS), TG Therapeutics
(TGTX) and AtriCure (ATRC) warrant a look. While
Conceptus carries a Zacks Rank #1 (Strong Buy), the other two
stocks carry a Zacks Rank #2 (Buy).
ATRICURE INC (ATRC): Free Stock Analysis Report
CONCEPTUS INC (CPTS): Free Stock Analysis Report
ST JUDE MEDICAL (STJ): Free Stock Analysis Report
TG THERAPEUTICS (TGTX): Get Free Report
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