发帖
雷达卡
North America United States
Health Care Hospital Supplies & Medical Devices
15 January 2009
Medical Devices & Supplies
4Q Preview/'09 Outlook, FX
Monitor, PT Changes, Models
Tao Levy
Research Analyst
(+1) 212 250-5322
tao.levy@db.com
Seth Damergy, CPA
Research Associate
(+001) 212 250-3284
seth.damergy@db.com
Imron Zafar
Associate Analyst
(+1) 212 250-7228
imron.zafar@db.com
Defensive MedTech stocks should outperform in 1H09
Assuming the stock market remains challenging and volatile in 2009, we believe
MedTech equities will be no different. Given that DB’s view of the U.S. economy
is more bearish than consensus, we believe a more defensive stance is warranted.
As a result, over the next six months, we favor companies with diversified
revenues, high free cash flow yields, and above-average exposure to non-elective
medical procedures: Covidien, Johnson & Johnson, and Medtronic.
Deutsche Bank Securities Inc.
All prices are those current at the end of the previous trading session unless otherwise indicated. Prices are sourced from local
exchanges via Reuters, Bloomberg and other vendors. Data is sourced from Deutsche Bank and subject companies. Deutsche
Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm
may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single
factor in making their investment decision. Independent, third-party research (IR) on certain companies covered by DBSI's research
is available to customers of DBSI in the United States at no cost. Customers can access IR at
http://gm.db.com/IndependentResearch or by calling 1-877-208-6300. DISCLOSURES AND ANALYST CERTIFICATIONS ARE
LOCATED IN APPENDIX 1.
Forecast change
Companies featured
Align Technology (ALGN.OQ),USD9.03 Hold
Aspect Medical Systems (ASPM.OQ),USD3.40 Hold
Alphatec Holdings Inc (ATEC.OQ),USD2.75 Hold
BioMimetic Therapeutics, In (BMTI.OQ),USD7.26
Boston Scientific (BSX.N),USD7.40 Buy
Covidien, Ltd. (COV.N),USD35.79 Buy
Gen-Probe (GPRO.OQ),USD42.04 Buy
Home Diagnostics, Inc. (HDIX.OQ),USD5.81 Hold
Integra LifeSciences (IART.OQ),USD28.07 Hold
Intuitive Surgical (ISRG.OQ),USD99.34 Buy
Johnson & Johnson (JNJ.N),USD57.95 Buy
Kinetic Concepts (KCI.N),USD22.02 Buy
Masimo Corp. (MASI.OQ),USD25.05 Buy
Medtronic (MDT.N),USD32.41 Buy
St. Jude Medical (STJ.N),USD29.97 Buy
Stereotaxis (STXS.OQ),USD3.10 Buy
Stryker (SYK.N),USD41.40 Hold
Zimmer Holdings (ZMH.N),USD40.53 Hold
Price Target Changes
Company From To
Align Technology $7 $8
Alphatec Holdings $5 $4
Boston Scientific $12 $10
Gen-Probe $62 $52
Home Diagnostics $8 $7
Integra Lifesciences $35 $30
Masimo $40 $35
Medtronic $45 $41
Stereotaxis $8 $6
Global Markets Research Company
2009 Outlook: Challenging to determine trends in a difficult economic
environment
We believe that, in general, the large cap MedTech stocks will relatively
outperform the broader market given the generally defensive nature of the group.
While some political uncertainties around the impact of health care reform will
exist over the next 12 to 18 months, we believe this will actually be neutral-topositive
for MedTech. However, we would point out that the main risk is that, in
an improving economy, the MedTech industry has historically underperformed the
broader market; as such, we would likely become more cautious in mid-2009 and
favor some of the higher beta MedTech names.
FX headwinds are upon us
On average, we estimate a negative 3.7% foreign currency impact to top-line
growth for the large cap companies within our coverage universe in 4Q08.
Assuming that currency rates stay at current levels, we expect the currency
headwind to continue through 3Q09 and to subside thereafter. We now estimate
an average 2.2% benefit from currency in 2008, and expect an overall negative
impact to 2009 revenues by -3.1%. While the FX impact on the bottom-line
should be marginal owing to currency hedging programs, several companies in our
universe should benefit in their 4Q results from the relative weakening of the US
Dollar vs. major foreign currencies toward the end of the calendar year; for
example, both Covidien’s and St. Jude Medical’s results should be aided on both
the top and bottom lines as prior guidance for each was based on less favorable
exchange rates.
Valuation & risks
Our price targets are generally based on a peer group analysis and employ
EV/sales or P/E multiples. Risks include regulatory setbacks, market share shifts,
reimbursement changes, and pricing declines. Detailed valuation/risks by company
are described herein.
Given the significant contraction of the market and relative valuations, we
have lowered our price targets accordingly, as summarized on page 8.
Table of Contents
2009 MedTech outlook...................................................................... 4
Price target changes.......................................................................... 8
FX monitor ......................................................................................... 9
Large Cap ......................................................................................... 11
Boston Scientific (BSX), $7.43.................................................................................................11
Covidien (COV), $36.59...........................................................................................................13
Intuitive Surgical (ISRG), $99.34..............................................................................................15
Johnson & Johnson (JNJ), $58.84 ..........................................................................................17
Medtronic (MDT), $32.41........................................................................................................19
St Jude Medical (STJ), $29.97 ................................................................................................21
Stryker (SYK), $40.46...............................................................................................................24
Zimmer (ZMH), $40.98............................................................................................................26
Small/Mid cap.................................................................................. 28
Align Technology (ALGN), $9.21 .............................................................................................28
Alphatec Holdings (ATEC), $2.81 ............................................................................................30
Aspect Medical (ASPM), $3.40 ...............................................................................................31
BioMimetic Therapeutics, $7.26 .............................................................................................32
Gen-Probe, Inc. (GPRO), $42.04 .............................................................................................34
Home Diagnostics (HDIX), $6.13 ............................................................................................36
Integra LifeSciences (IART), $28.54 ........................................................................................38
Kinetic Concepts (KCI), $21.85................................................................................................39
Masimo (MASI), $25.00 ..........................................................................................................41
Stereotaxis (STXS), $3.10........................................................................................................43
Models.............................................................................................. 45
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