Goldman Sachs Maintains Sell on Boston Scientific (BSX)
Thursday, February 02, 2022 12:07 PM

Goldman Sachs has maintained Sell rating and price target on Boston Scientific (BSX) shares on end-markets remaining weak due to increased pricing pressure and lethargic demand.

The brokerage believes that restructuring initiatives are not yielding incremental increase and are likely to serve more as a source of offsetting revenue deficits. The company’s 2012 outlook indicate top line weakness outweighing cost control measures.

Boston scientific earned adjusted earnings of 8 cents a share for the fourth quarter that was 1 cent above Goldman Sachs estimate, but in line with consensus. However, revenue of $1.848 billion came 1.9 percent below Goldman Sachs estimate and 3.2 percent lower than consensus.

The company guided revenues in the range of $7.3 - $7.7 billion for 2012 compared to Goldman Sachs projection of $7.46 - $7.66 billion. The adjusted earnings are estimated between 36 and 46 cents a share versus Goldman Sachs estimation of 44 – 47 cents a share.

For the first quarter, Boston projected adjusted earnings of 5 – 8 cents a share on revenues of $1.825 - $1.9 billion. Goldman Sachs projects adjusted EPS of 10 cents a share on revenues of $1.903 billion and consensus estimate of 11 cents a share on revenues of $1.909 billion.

Analyst David Roman views that all business divisions were below expectations. With half of CRM vendors have now reported its earnings results, the analysts estimate year-on-year market fall accelerated during the fourth quarter.

The brokerage indicated that gross margin exceeded its projection by 1 percentage point, but slipped 2.8 percentage point year-over-year. On 2012 outlook, Goldman Sachs sees midpoint of the revenue and EPS ranges implies top-line growth outpacing bottom-line by 11.3 percentage points. The brokerage is concerned about the sizeable year-on-year deterioration in EPS leverage on the back of Boston’s stated focus on cost cutting efforts to fuel EPS growth.