Leerink equity analysts bullish about Boston Scientific

Boston Scientific's Synergy stent--Courtesy of Boston Scientific

Leerink equity analysts upgraded shares of Boston Scientific ($BSX) today to the "outperform" rating from the "market perform" rating, citing new product launches and manageable litigation risk. The analysts said the stroke-fighting Watchman and partially bioabsorbable Synergy stent represent "the two most meaningful pipeline products expected to launch over the next few years, and both are likely to be significantly accretive to both gross and operating margins." Lawsuits over the (failed) acquisition of Guidant, transvaginal mesh, and IRS transfer pricing are a concern on Wall Street. But Leerink thinks Boston Scientific is generating enough free cash flow to cover the worst case scenario of $8 billion in damages, which they view as an unlikely outcome in the first place. Boston Scientific has had a rough past couple of years, enduring rounds of cost cutting and layoffs, but Leerink says, "Over the last 2 years, BSX's turnaround story has begun to play out, with new management delivering solid execution against both near- and long-term sales and EPS growth targets." Story

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