Two keys to St. Jude Medical's success: systole, diastole

As the U.S. baby boom generation ages, demand for medical services is likely to increase, which is good news for St. Jude Medical.

St. Jude Medical (NYSE: STJ) develops and markets devices that treat cardiovascular disease and is also one of the world's leading manufacturers of mechanical heart valves.

St. Jude Medical's core business is its cardiac rhythm management division, which includes pacemakers, implantable cardioverter defibrillators [ICDs] and other equipment to regulate heart rhythm.

In general, analysts believe new product introductions and enhancements to existing products will allow STJ to increase its ICD market share in 2008, with overall company revenues advancing 13-17%. The Reuters F2007/F2008 EPS consensus estimates for STJ are $1.80/$2.09.

The risks? Analysts are keeping an eye on STJ's new product roll-out timetable. Further, negative changes to Medicare reimbursement rates would also hurt STJ's results.

The First Call mean rating for STJ is: Buy [25 firms]. Mean 2008 target: $47.00 [high: $54, low: $40].

Stock Analysis: St Jude Medical is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than two years should be rewarded from STJ's shares. Sell / Stop Loss if you were to purchase shares in this company: $28.