Additionally, the firm lowered the St. Paul, MN-based global medical device company's price target to $80 from $85.
The downgrade and price change are the result of St. Jude's pending acquisition by Abbott Laboratories (ABT), a Chicago-based American worldwide healthcare company, which the firm believes will close.
St. Jude is a "growth asset" for Abbott that will allow it to "more aggressively compete at the hospital level" over Medtronic (MDT) or Johnson & Johnson (JNJ), according to Leerink.
Additionally, the acquisition will have an immediate positive affect on St. Jude's EPS and will drive sales and growth in 2017 and beyond, the firm said.
Leerink does not expect a competitive bid.
Shares of St. Jude Medical are up by 0.34% to $80.85 in late-morning trading.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate ST JUDE MEDICAL INC as a Buy with a ratings score of B. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, expanding profit margins and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.STJ data by YCharts