Why Credit Suisse Just Upgraded St. Jude Medical

Courtesy of Benzinga.

In a report published Monday, Credit Suisse analysts upgraded St Jude Medical, Inc. (NYSE: STJ) from Underperform to Neutral. The analysts expect the share price gains witnessed by Medtronic plc (NYSE: MDT) to diminish by mid-2015, while expecting upside to CardioMEMS sales in the long-term.

“While we expect CardioMEMS sales to be in line with guidance this year we see long-term upside based on our recently published survey. Moreover we expect Atrial Fibrillation & Neuromodulation to gain momentum over the course of the year, leaving around 5% CC sales growth after adjusting for missed selling days,” the analysts said.

Credit Suisse has also forecasted top-line acceleration for St Jude to close to 3.9 percent in FY15 from 2.0 percent in FY13, on the back of continued traction from FFR & OCT as well as new product launches. In fact, there could be further upside to the estimates in the longer-term if CardioMEMS witnesses stronger-than-anticipated uptake.

“We currently forecast $77M in 2015 CardioMEMS sales vs. guidance of $70M, but note that the Street’s anticipation for 2016 CardioMEMs sales will be determinative for the stock in the 2H of 2015,” the analysts added. However, the sales/EPS estimates for FY15 revised down due to worsening foreign exchange rates.

Posted-In: Credit SuisseAnalyst Color Upgrades Analyst Ratings