Boston Scientific Slips After Estimate of Sales Drop

Boston Scientific shares were lower after the medical-device major estimated that fourth- quarter sales fell 6.8% from a year earlier.
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Boston Scientific  (BSX) - Get Report shares fell Monday after the medical-device titan estimated that fourth-quarter net sales totaled $2.71 billion, down 6.8% from $2.9 billion a year earlier.

For all of 2020, the company generated net sales of $9.91 billion, down 8% from $10.74 billion in 2019.

Boston Scientific shares recently traded at $35.86, down 2.4%. They'd slumped 20% in the 12 months through Monday, as many medical treatments outside those for the coronavirus have been suspended during the pandemic.

Morningstar analyst Debbie Wang gives the company a narrow-moat rating. 

“Boston Scientific’s decision to recall its Lotus Edge transcatheter aortic valve replacement product and end the program took us by surprise," she wrote in November. 

"[We’re] moderately lowering our fair-value estimate by $4 to $42 per share after revising our estimates for the firm’s [Transcatheter Aortic Valve Replacement] prospects. 

“With the elimination of Lotus and our tempered expectations for its second TAVR product, Acurate neo2, this leaves Boston several years away from its next opportunity to penetrate the U.S. market. 

"Nonetheless, Boston still enjoys a broad-based lineup of products and pipeline candidates, beyond structural heart, that should drive mid-single-digit top-line growth from 2021 through 2024. Additionally, we do not think this development is substantial enough to shift Boston’s narrow economic moat, as the firm’s intangible assets are largely unchanged.”

Further, “[we] think the firm's ability to emerge from nearly a decade of upheaval underscores just how tough a competitor Boston is as well as how difficult it is for any new competitors to establish a foothold in these highly consolidated device markets,” Wang said.