1、U.S.Medical Supplies&Devices 3Q19 Investor Sentiment Survey DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES,ANALYST CERTIFICATIONS,LEGAL ENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYSTS.US Disclosure:Credit Suisse does and seeks to do business with companies covered
2、in its research reports.As a result,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.9 October 2019 Research Analysts Matt Miksic
3、212-325-4381 matt.miksiccredit- Vik Chopra 212-325-1749 vik.chopracredit- Equity Research Americas 2 10/9/2019 Credit Suisse Securities(USA)LLC,Matt Miksic Source:Credit Suisse estimates ABT,BSX,EW and SYK Top Ranking as Most Favorite Names ABT remains the favorite name among respondents again this
4、quarter and BSX moves up from#5 to#2 this quarter.SYK(#11 to#4)and BSX saw the largest increases in ranking compared to July,while ZBH(#3 to#8)and ALC(#7 to#10)saw the largest decrease in ranking vs.our July survey.EW,SYK and ABT Ranked as Most Likely to Beat,While WMGI,ZBH and ALC Viewed as Most Li
5、kely to Miss Respondents seem confident in EWs ability to beat overall consensus estimates,as well as WW TAVR,with only 24%expecting in-line performance.Respondents remain cautious on WMGI following the Q2 results.Surprisingly,most respondents expect ZBH to miss in Q3,despite having an extra selling
6、 day.The stock also dropped in favorite name rankings from#3 July to#8.Long-Term TAVR Market Expectations Rise Slightly to$6 bil Respondents now see the 2021 TAVR market as being$6 bil,up from vs.$5.7 bil last quarter.Only 8%of respondents expect the market to be below=$5 bil,which compares to 27%in
7、 July.Conversely,expectations for BSXs U.S.TAVR share in 2019 declined from 8-9%to 6-7%.Over 2/3 See MDTs Pipeline as Sufficient Enough to Drive F2H20 Acceleration;86%Expect ABTs Libre 2 Approval This Year Over two-thirds of respondents(69%)think that MDTs F20 pipeline can drive back half accelerati
8、on,up from 52%in July and see Robotic Surgery as the most significant growth driver for MDT followed by Micra AV and Robotic Spine Surgery.For ABT,86%expect Libre 2.0 approval in 2019 and 72%expect it will also receive iCGM designation.Broadly Speaking,Only 1/3 of Respondents Expect the Group to Bea
9、t Expectations in Q3-Respondents expectations for Q3 appear to be similar to last quarter,with around 2/3 expecting results to meet expectations and the remaining 1/3 expecting the group to beat.Respondents Signal a Shift Towards a Slightly Lower Weighting for Med Tech,Despite the Sector Remaining t
10、he Most Preferred Group within Healthcare The majority of respondents expect to remain overweight Med Tech in Q4(66%),but there was a slight decrease from 71%in Q3(up slightly from 57%Overweight weighting in the prior quarter).Around 67%of Long-Onlys expect to be overweight Med Tech in Q4(down from
11、80%heading into Q3),while 64%of long/shorts plan to Overweight,up from 55%entering Q3.Large Cap MS&D remains respondents favorite sector within Healthcare,followed again by Diagnostic and Tools and SMID-Cap MedTech.Whats New?We surveyed investors to gauge expectations and preferences for Medical Sup
12、plies and Devices heading into Q3 earnings.We include an analysis of anonymous responses from 29 investors(52%Long-Only and 48%Long/Short).Respondents Expect In-Line Q3,With Some Bright Spots 3 10/9/2019 Credit Suisse Securities(USA)LLC,Matt Miksic Source:Credit Suisse estimates Sentiment,Favorites
13、and Expectations for Q3 4 10/9/2019 Credit Suisse Securities(USA)LLC,Matt Miksic Source:Credit Suisse estimates Long/Short respondents:Only 29%expect the group to beat down from 36%in Q2 Long-Only respondents:Only 40%expect the group to beat,up from 30%in Q2.Only 1/3 of Respondents Expect MedTech to
14、 Beat,similar to Q2,suggesting expectations may be relatively low.Q3 Expectations Appear Measured,with Most Respondents Expecting In-Line Sector Performance 50%32%34%50%61%66%3%3%1Q19(n=30)2Q19(n=31)3Q19(n=29)Exceed expectationsMeet expectationsMiss expectationsDont Know 45%30%40%55%60%60%5%5%1Q19(n
15、=20)2Q19(n=20)3Q19(n=15)Exceed expectationsMeet expectationsMiss expectationsDont Know 60%36%29%40%64%71%1Q19(n=10)2Q19(n=11)3Q19(n=14)Exceed expectationsMeet expectationsMiss expectationsDont Know 5 10/9/2019 Credit Suisse Securities(USA)LLC,Matt Miksic Source:Credit Suisse estimates ABT and BSX ra
16、nked highest as the most favored stocks in our universe this quarter,followed by EW and SYK with BAX and MDT tied for fifth.We note that the top three favorite names from our survey in July(ABT,EW,and ZBH)were up 4.6%over the past 90 days,compared to our coverage universe,which was up 5.3%over the s
17、ame period.ABT and BSX are the Most Favored Stocks in Our Universe,Followed by EW and SYK ABTBSXEWSYKBAXMDTGMEDZBHWMGIALCJNJNUVAIART(n=29)6 10/9/2019 Credit Suisse Securities(USA)LLC,Matt Miksic Source:Credit Suisse estimates BSX and MDT are the favorite stocks among our Long/Short respondents,follo
18、wed by SYK and BAX and ABT(tied).Long-Only respondents appear to have a similar preference for ABT and BSX as their favorite stocks,followed by EW,BAX and GMED.ABT Favorite Among Long-Onlys,BSX is Favorite for L/S Respondents ABTBSXEWBAXGMEDSYKNUVAZBHIARTWMGIMDTALC(n=15)BSXMDTSYKBAXABTZBHGMEDJNJEWWM
19、GIALC(n=14)Food for Thought:MDT rose from least favorite in July to 2nd favorite among Long/Shorts,but dropped from 3rd favorite name among Long-Onlys in July to second-to-last in this survey.7 10/9/2019 Credit Suisse Securities(USA)LLC,Matt Miksic Source:Credit Suisse estimates For all respondents,
20、ABT remains the most favored stock in Q3(along with in Q2 and Q1)followed by BSX and EW.SYK and BSX saw the largest increases in ranking compared to July moving up 6 and 3 spots,respectively.ZBH and ALC declined the most in rankings vs.our July survey,moving down 5 and 3 spots,respectively.ABT Remai
21、ns Most Favorite Stock in Both Q3 and Q2 Followed By BSX and EW,ZBH Dips From#3 Last Q ABTBSXEWSYKBAXMDTGMEDZBHWMGIALCJNJNUVAIARTOct-19(n=29)Jul-19(n=31)Apr-19(n=30)8 10/9/2019 Credit Suisse Securities(USA)LLC,Matt Miksic Source:Credit Suisse estimates Long/Short respondents:SYK ranked mostly like t
22、o beat,followed by EW and BSX.L/S appear most concerned about ABT,BAX and ZBH.Long-Only respondents:EW most likely to beat,followed by ABT and BAX.WMGI ranked most likely to miss followed by ALC and ZBH.EW ranked most likely to beat,followed by SYK and ABT.WMGI viewed as most likely to miss followed
23、 by ZBH and ALC.Respondents View EW as Most Likely to Beat,WMGI Most Likely to Miss Most Likely to Beat 2nd Most Likely 3rd Most Likely Most Likely to Miss 2nd Most Likely 3rd Most Likely EWSYKABTWMGIZBHALCExceed Street ExpectationsMiss Street Expectations(n=29)Most Likely to Beat 2nd Most Likely 3r
24、d Most Likely Most Likely to Miss 2nd Most Likely 3rd Most Likely EWABTBAX WMGIALCZBHExceed StreetExpectationsMiss StreetExpectations(n=15)Most Likely to Beat 2nd Most Likely 3rd Most Likely Most Likely to Miss 2nd Most Likely 3rd Most Likely SYKEWBSXABTBAXZBHExceed StreetExpectationsMiss StreetExpe
25、ctations(n=14)9 10/9/2019 Credit Suisse Securities(USA)LLC,Matt Miksic Source:Credit Suisse estimates Long/Shorts:Conversely L/S expect to increase their allocation to Med Tech to 64%in Q4,up from 55%in Q3.Respondents targeting Neutral and Underweight positions both declined Long-Onlys:Slight loweri
26、ng their expected allocation to Med Tech,with 67%expecting to be Overweight relative to the market in Q4,down from 80%in Q3.Respondents expecting Neutral rose from 15%to 20%,and those planning to be Underweight rose from 5%to 13%Our respondents signal slightly lower weightings for MedTech Q4,with 66
27、%targeting Overweight (down from 71%in July).The%of respondents targeting Underweight exposure to Med Tech increased slightly to 14%from 10%in the prior quarter.Respondents Signal Slight Decrease in Med Tech Weighting 72%57%71%66%11%30%19%21%17%13%10%14%1Q19(n=37)2Q19(n=30)3Q19(n=31)4Q19E(n=29)Overw
28、eightNeutralUnderweight75%60%80%67%13%30%15%20%13%10%5%13%1Q19(n=27)2Q19(n=20)3Q19(n=20)4Q19E(n=15)OverweightNeutralUnderweight50%50%55%64%0%30%27%21%50%20%18%14%1Q19(n=10)2Q19(n=10)3Q19(n=11)4Q19E(n=14)OverweightNeutralUnderweight10 10/9/2019 Credit Suisse Securities(USA)LLC,Matt Miksic Source:Cred
29、it Suisse estimates Long/Short respondents:Also continue to favor Large-Cap MS&D,followed by Diagnostics&Tools and SMID-Cap MS&D,which switch spots vs.July Long-Only respondents:LC MS&D also remains the most favored sector within Healthcare for Long-Only respondents,followed by SMID-Cap MS&D and Dia
30、gnostics&Tools,which falls to 3rd place from July For all respondents,Large-Cap MS&D remains the most favored sector within Healthcare,followed by Diagnostics&Tools and SMID-Cap MS&D(consistent with July and April).Large-Cap MS&D Remains Favorite Within Healthcare Followed By Diag&Tools and SMID-Cap
31、 MS&D#1#2#3#1#2#3#1#2#3#1#2#3 LC MS&DSMID-Cap MS&DDiag.&ToolsLC MS&DDiag.&ToolsSMID-Cap MS&DLC MS&DDiag.&ToolsSMID-Cap MS&DLC MS&DDiag.&ToolsSMID-Cap MS&DJan-19(n=37)Apr-19(n=30)Jul-19(n=31)Oct-19(n=29)#1#2#3#1#2#3#1#2#3#1#2#3 LC MS&DManaged CareSMID-Cap MS&DLC MS&DDiag.&ToolsAnimal HealthLC MS&DDia
32、g.&ToolsManaged CareLC MS&DSMID-Cap MS&DDiag.&ToolsJan-19(n=27)Apr-19(n=20)Jul-19(n=20)Oct-19(n=15)#1#2#3#1#2#3#1#2#3#1#2#3 SMID-Cap MS&DLC MS&DDiag.&ToolsLC MS&DDiag.&ToolsCROsLC MS&DSMID-Cap MS&DDiag.&ToolsLC MS&DDiag.&ToolsSMID-Cap MS&DJan-19(n=10)Apr-19(n=10)Jul-19(n=11)Oct-19(n=14)11 10/9/2019
33、Credit Suisse Securities(USA)LLC,Matt Miksic Source:Credit Suisse estimates Long/Short respondents:Consistent with last quarter,our Long/Short respondents see PBMs&Drug Distributors as their least favorite Healthcare sector.This is followed by Managed Care and Large-cap Pharma Long-Only respondents:
34、PBMs&Drug Distributors ranked least favorite among Long-Onlys,followed by HC Providers and Large-cap Biotech PBMs&Drug Distributors ranked as the least favored sector within Healthcare,followed by Large-cap Biotech both consistent with July.Managed Care comes in third,replacing HC Providers in July
35、PBMs&Drug Distributors,LC Biotech and Managed Care Least Favorite Sectors#1#2#3#1#2#3#1#2#3#1#2#3 PBMs&Drug Dist.HC Providers&FacilitiesSMID-Cap BiotechPBMs&Drug Dist.HC Providers&FacilitiesLC BiotechPBMs&Drug Dist.LC BiotechHC Providers&FacilitiesPBMs&Drug Dist.LC BiotechManaged CareJan-19(n=37)Apr
36、-19(n=30)Jul-19(n=31)Oct-19(n=29)#1#2#3#1#2#3#1#2#3#1#2#3 PBMs&Drug Dist.HC Providers&FacilitiesLC BiotechPBMs&Drug Dist.HC Providers&FacilitiesLC BiotechPBMs&Drug Dist.LC BiotechLC PharmaPBMs&Drug Dist.HC Providers&FacilitiesLC BiotechJan-19(n=27)Apr-19(n=20)Jul-19(n=20)Oct-19(n=15)#1#2#3#1#2#3#1#2
37、#3#1#2#3 PBMs&Drug Dist.HC Providers&FacilitiesLC PharmaPBMs&Drug Dist.HC Providers&FacilitiesLC BiotechPBMs&Drug Dist.HC Providers&FacilitiesLC BiotechPBMs&Drug Dist.Managed CareLC PharmaJan-19(n=10)Apr-19(n=10)Jul-19(n=11)Oct-19(n=14)12 10/9/2019 Credit Suisse Securities(USA)LLC,Matt Miksic Source
38、:Credit Suisse estimates Key Debates and Hot Topics:TAVR,Robots,Pipeline 5%12%4%19%15%15%4%41%38%27%39%16%31%27%22%19%15%19%30%Jan-19(n=37)Apr-19(n=30)Jul-19(n=31)Oct-19(n=29)Less than$5 bil$5 bil$5.5 bil$6 bilMore than$6 bil13 10/9/2019 Credit Suisse Securities(USA)LLC,Matt Miksic Source:Credit Sui
39、sse estimates Long/Short respondents:Around 55%of L/S respondents expect the market to reach$6 bil or more in 2021(up from 40%in July),representing a more significant increase in bullish sentiment Long-Onlys:Long-Only respondents remain generally bullish on the long-term TAVR market,with 50%estimati
40、ng it to be$6 bil or more(similar to July),and on average see the market at$6.0 bil,up slightly from$5.9 bil in July Respondents on average see the long-term TAVR market as being$6 bil,up from$5.7 bil in July.Over 50%of respondents estimate the market to be$6 bil or greater,up from 46%in the previou
41、s two quarters.Only 8%of respondents expect the market to be$5 bil or less,down significantly from 27%in July How Large is the Long-Term TAVR Market?Expectations Up to$6.0 bil from$5.7 bil in July 7%6%30%29%31%42%19%35%19%25%22%12%31%25%Jan-19(n=27)Apr-19(n=20)Jul-19(n=20)Oct-19(n=15)Less than$5 bil
42、$5 bil$5.5 bil$6 bilMore than$6 bil20%10%20%70%56%20%36%10%22%40%18%10%22%36%Jan-19(n=10)Apr-19(n=10)Jul-19(n=11)Oct-19(n=14)Less than$5 bil$5 bil$5.5 bil$6 bilMore than$6 bil14 10/9/2019 Credit Suisse Securities(USA)LLC,Matt Miksic Source:Credit Suisse estimates Long/Short respondents also appear t
43、o have become less bullish on U.S.Lotus share,expecting 7.2%share on a weighted basis,down from 10.5%in July and in-line with July expectations Long-Only respondents are less bullish with 62%expecting BSX to gain 5%share in the U.S.and 6.1%share on a weighted basis,down from 7.3%in July Half of resp
44、ondents expect BSX to gain 5%share,compared to 52%in July.In addition,its worth noting that the proportion of respondents expecting more than 20%share has increased from 4%in July to 7%in October.We continue to see BSXs US share reaching 10%by the end of 2020 Expectations for BSX U.S.TAVR Share Rema
45、in Tempered:6-7%Share,Down from 8-9%in July 46%36%48%52%32%50%16%37%14%4%16%4%11%16%8%4%7%Jan-19(n=37)Apr-19(n=30)Jul-19(n=31)Oct-19(n=29)Less than 5%5-10%11-15%16-20%More than 20%41%37%53%62%33%53%27%31%15%7%11%7%11%7%8%Jan-19(n=27)Apr-19(n=20)Jul-19(n=20)Oct-19(n=15)Less than 5%5-10%11-15%16-20%Mo
46、re than 20%60%33%40%43%30%44%43%10%11%30%7%11%30%7%Jan-19(n=10)Apr-19(n=10)Jul-19(n=11)Oct-19(n=14)Less than 5%5-10%11-15%16-20%More than 20%15 10/9/2019 Credit Suisse Securities(USA)LLC,Matt Miksic Source:Credit Suisse estimates Long/Short respondents:Half expect EW to beat results,the least optimi
47、stic of responses.Over a quarter expect the company to meet expectations and 14%expect EW to miss Q3.Long-Only respondents:More optimistic with 67%respondents expecting EW to beat expectations and 20%expect the company to meet expectations.No Long-Only respondents expect EW to miss Q3 expectations.O
48、verall,59%of respondents expect EW to beat Q3 WW TAVR consensus expectations and 24%expect the company to meet Q3 expectations.Around 7%of all respondents expect EW to miss Q3 WW TAVR expectations and 10%Dont Know.How Do You Expect EW to Perform in Q3 vs.Consensus WW TAVR Expectations?80%Expect Meet
49、 or Beat 59%24%7%10%ExceedMeetMissDont know(n=29)67%20%0%13%ExceedMeetMissDont know(n=15)50%29%14%7%ExceedMeetMissDont know(n=14)16 10/9/2019 Credit Suisse Securities(USA)LLC,Matt Miksic Source:Credit Suisse estimates Long/Short respondents:Most bullish with 79%believing that MDTs F20 pipeline can d
50、rive back half acceleration,up significantly from 45%in July Long-Only respondents:60%think that MDTs F20 pipeline can drive back half acceleration,up from 55%in July Over two-third of respondents(69%)think that MDTs F20 pipeline can drive back half acceleration,up from 52%in July.Just 17%did not th
