We maintain our Neutral recommendation for St. Jude Medical, Inc. (STJ) with a target price of $41 based on a P/E of 14.9x our fiscal 2010 EPS estimate of $2.75. The earnings estimate revisions for this Zacks Rank #3 stock have been mixed in the past 30 days. 

During the past 30 days, three out of 29 analysts have upgraded their earnings estimates while two have downgraded their estimates for fiscal 2010. For fiscal 2011, three out of 25 analysts have upgraded their earnings estimates while two have lowered their estimates.

St. Jude’s fourth quarter fiscal 2009 earnings per share came in at 64 cents, surpassing the Zacks Consensus Estimate of 62 cents and the year-ago earnings of 59 cents. For fiscal 2009, earnings per share were $2.43, beating the Zacks Consensus Estimate of $2.42 and the year-ago earnings of $2.31.

Net sales in the fourth quarter increased 6% year over year to $1,203 million. Growth was registered across all business segments.

Cardiac Rhythm Management (CRM) sales increased 3% year over year to $698 million. Growth was led by higher sales of the company’s implantable cardioverter defibrillator (ICD) and pacemaker that increased 2% and 3% year over year to $395 million and $303 million, respectively.

Cardiovascular sales increased 10% year over year to $240 million. Atrial Fibrillation revenues increased 10% year over year to $171 million. Neuromodulation revenues increased 21% year over year to $94 million.

St. Jude also registered growth in its top-line in fiscal 2009. Net sales increased 7% year over year to $4.681 billion with growth witnessed across all business segments.

St. Jude Medical is a leading designer, manufacturer and distributor of medical devices used for treating cardiovascular and neurological conditions. The company’s closest competitors are Medtronic Inc. (MDT) and Boston Scientific Corporation (BSX).

St. Jude Medical is a leader in the mechanical heart valve market. Its mechanical heart valves have been implanted in over 1.8 million patients worldwide.
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