JMP upgrades Boston Scientific to strong buy

Boston Scientific Corp. was upgraded by JMP Securities analyst Robert C. Faulkner to a strong buy rating after the company announced making a definitive merger bid for Guidant Corp. in a cash and stock deal that also calls for selling a Guidant business unit to Abbott Laboratories, Inc. The primary risk, JMP said, is that the Guidant board will resist splitting up the company. But, JMP said it doesn't think it will derail the deal. The stock was rated JMP's No. 1 pick, and post-merger earnings-per-share estimates were increased to $1.50 from $1.46 in 2006. Shares of the Natick, Mass., medical device company were down 36 cents, or 1.37%, at $25.88 on volume of 16,834,100 shares versus the three-month running average of 4,891,530 shares.

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