S&P Ups Boston Scientfic

Also: analysts' opinions on Furniture Brands and Steel Dynamics

Boston Scientific (BSX ): Upgrades to 4 STARS (accumulate) from 3 STARS (hold)

Analyst: Robert Gold

The FDA approved the company's Express2 coronary stent system, which is a competitive platform for use in a drug-coated coronary stent program. Despite a soft European rollout, Express2 should drive some fourth-quarter U.S. market share gains. S&P is boosting its 2002 revenue forecast to $2.9 billion from $2.8 billion. S&P has left the 2002 earnings per share estimate at $0.98 and raised 2003's by $0.05 to $1.20.

At 25 times the 2003 EPS estimate amd 3.9 times the 2003 sales projection, Boston Scientfic is at premium multiples vs. Guidant, but remains at a sharp discount to Medtronic.

Furniture Brands International (FBN ): Reiterates 4 STARS (accumulate)

Analyst: Efraim Levy

The company warned that the recovery in demand for mid-priced furniture moderated during the third quarter. S&P has lowered its revenue and margin projections and now expects third-quarter earnings per share of $0.44, down from S&P and the Street's mean forecasts of $0.50. S&P is also reducing the 2002 EPS estimate by $0.12, to $2.18.

However, with expected stronger demand next year, S&P is only reducing the forecast for 2003 by a dime, to $2.63. With a lower-than-peers, single-digit price-earnings multiple on the 2003 estimate, Furniture Brand should outperform when demand recovers.

Steel Dynamics (STLD ): Maintains 3 STARS (hold)

Analyst: Leo Larkin

Shares are up on the company's bullish guidance for the third quarter. Steel Dynamics sees earnings per share approaching $0.60, compared with the Street's consensus of $0.44. Steel Dynamics cited higher steel prices and indicated that the fourth quarter could be similarly strong.

S&P has raised its 2002 estimate to $1.45 from $1.35 on that basis but is keeping its 2003 estimate at $1.70. Higher prices will boost imports and output from reconstituted mills. This is likely to cap prices and profits by early 2003. With Steel Dynamics needing an equity offering to fund a recent acquisition, S&P would not add to holdings.

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