Goldman Slashes Guidant Rating

Analyst Lawrence Keusch says the medical-device maker's base business is seeing tougher competition and could further erode

Goldman Sachs removed Guidant Corp. (GDT ) from its recommended list and now rates the shares market perform. Goldman also trimmed estimates.

Analyst Lawrence Keusch says while stent sales were in line with his forecast, defibrillators came in a bit lower. More important is Guidant's downward Q2 guidance based on a tough quarter for defibrillators due to Prizm's recall and greater-than-expected stent competition. He notes his investment thesis is predicated on Guidant maintaining its base business until FDA clearance of the company's congestive heart-failure device (Contac).

Keusch says it now looks like the base business may erode further. He sees little upside in the near term. Keusch cut the $1.78 2001 EPS estimate to $1.63 and cut the $2.11 2002 estimate to $1.93.

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