Although U.S. breast implant procedures rose steadily between 1997 and 2007, Haresco forecasts that the number will decline 3% this year and another 2% next year.
He sees a promising "long-term growth opportunity" for Mentor's implant business, but he warns that the "current financial and economic crisis will continue to exert pressure on the market."
Maxim Group analyst Anthony Vendetti predicts there could be a rebound in U.S. breast implants within the next 12 months even though the outlook right now is "bleak." Vendetti has a buy rating on Mentor and doesn't own shares.Mentor and Allergan have a duopoly in the U.S. breast implant market, and both have benefitted from the Food and Drug Administration's ruling in 2006 that silicone breast implants, which are more expensive than saline, could be used for cosmetic purposes. Previously, the U.S. required cosmetic implants to use saline. Both companies also sell their implants foreign markets, primarily Europe, where they compete with several companies. Eventually, Haresco believes the U.S. will look like other markets in which silicone implants account for 75% of breast augmentation procedures. Mentor is trying to diversify. Its other revenue now comes from skin-care products and liposuction equipment, with more dermatology offerings, including a Botox-like drug. Allergan owns a healthy portion of the skin game thanks to Botox. For the first half of 2008, Botox produced $663 million in sales, up 15% from the year-ago period, and accounted for 30% of the total.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV