For Immediate Release
Chicago, IL – October 3, 2012 – Today, Zacks Equity Research discusses the U.S. MedTech, including Edwards Lifesciences (EW), Intuitive Surgical (ISRG), Abiomed (ABMD), Cooper Companies (COO) and CareFusion (CFN).
A synopsis of today’s Industry Outlook is presented below. The full article can be read at
In our universe, we see growth potential in companies dealing with promising technologies. In this respect, Edwards Lifesciences (EW) represents a value proposition. Following the US approval of Sapien (for the treatment of certain inoperable patients with severe symptomatic aortic stenosis) in November 2011, sales of the device have been quite encouraging so far.
The company is also progressing well with respect to imparting training centers. Given a strong second quarter performance, Edwards raised its 2012 outlook for Sapien sales in the US. Moreover, with a favorable recommendation from the FDA’s advisory panel for Sapien in high-risk patients, the probability of final approval is high.
Robotic surgery is another fledgling area and Intuitive Surgical (ISRG) clearly leads the pack with its state-of-the-art technology. Intuitive enjoys a virtual monopoly in robotic surgery and continues to deliver forecast-topping earnings. Its sales are growing at a torrid pace buoyed by the da Vinci surgical system. With higher average selling price per system, which stood at $1.53 million in the second quarter of 2012 (up from $1.44 million in the year-ago period and $1.47 million in the first quarter) and upgraded revenue outlook for 2012 (growth now expected at 20−23% versus earlier projection of 19−21%), this company is well placed to traverse a higher trajectory.
We also believe that cardiac assist devices maker Abiomed (ABMD) represents another attractive opportunity for investors. The company reported the best quarter in its history with 42% growth in revenues and 56% growth in its Impella device, which is increasingly penetrating the percutaneous circulatory support segment in the US. This is amply proved by the more than 30% growth recorded by Impella for the 11th straight quarter. Given the strong growth potential for both Intuitive Surgical and Abiomed, estimates for these companies have been on the rise since the last reported quarter.
We are positive on Cooper Companies (COO), which reported a strong third quarter of fiscal 2012, leading it to raise guidance for the fiscal year. Additional factors such as margin expansion, acquisitions expanding the product line and geographical reach as well as share buybacks and an attractive valuation are driving the stock. Moreover, this contact lens and women’s health focused company has delivered positive earnings surprises in six of the last seven quarters with an average beat of 10.9%.
On the back of rising earnings estimates owing to strong fourth quarter and fiscal 2012 results, and several strategic initiatives to re-align its portfolio, we are bullish on CareFusion (CFN). Moreover, this global medical technology company has delivered positive earnings surprises in six of the last seven quarters with an average beat of 5.1%. While the company is dogged by product recalls, it is continuously working on investing in quality systems.
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