Why Boston Scientific Corporation (BSX) Hit a Four-Year High Today

NEW YORK (TheStreet) -- Boston Scientific Corporation  (BSX) hit a four-year high on Monday after a nearly 4% increase sent the stock to $12.57.

Morgan Stanley and Oppenheimer both upgraded the stock, and Morgan Stanley's David Lewis elevated the stock from equal-weight to overweight based on the strength of its pipeline and its numerous opportunities to expand margins. Both companies also gave Boston Scientific a target price at $15.

"Over the past several years, the company has targeted investments across several markets to accelerate growth and drive leverage," Lewis noted in his report. "We believe better recognition of this strategy will drive future outperformance even after a robust 2013 as accelerating sales and earnings growth drive improving financial performance over the next several years."

TheStreet Ratings team rates Boston Scientific as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about its recommendation:

"The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and compelling growth in net income. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • BSX's revenue growth has slightly outpaced the industry average of 3.5%. Since the same quarter one year prior, revenues slightly increased by 0.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 100.00% and other important driving factors, this stock has surged by 102.20% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
  • BOSTON SCIENTIFIC CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BOSTON SCIENTIFIC CORP swung to a loss, reporting -$2.87 versus $0.29 in the prior year. This year, the market expects an improvement in earnings ($0.45 versus -$2.87).
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Health Care Equipment & Supplies industry and the overall market, BOSTON SCIENTIFIC CORP's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has declined marginally to $250.00 million or 8.08% when compared to the same quarter last year. Despite a decrease in cash flow BOSTON SCIENTIFIC CORP is still fairing well by exceeding its industry average cash flow growth rate of -44.39%.
  • You can view the full analysis from the report here: BSX Ratings Report

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