Morgan Stanley Cuts Boston Scientific to 'Equal-Weight'

Analyst Glenn Reicin thinks the medical-device maker will probably hit a peak earnings cycle sometime in 2005 amid new competition

Morgan Stanley downgraded Boston Scientific (BSX ) to equal-weight from overweight.

says he cut his rating because he believes that Boston Scientific, unlike most medical technology companies, will probably hit a peak earnings cycle sometime in 2005 as new competition emerges from Guidant and Medtronics. He also notes Boston Scientific remains vulnerable on patent issues relating to its stent technology.

Meanwhile, Reicin expects the company's Taxus IV drug-eluting stent data, to be presented in September, to be a favorable event for the company and its earnings outlook. As such, he upgraded the $2.55 2004 earnings per share estimate to $3.28, and upgraded the $2.93 2005 earnings per share estimate to $3.75, but sees the 2006 earnings per share estimate slipping to $3.08. Finally, Reicin upgraded his $69 target to $75.

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