Moody’s: U.S. medical device firms face soft organic growth prospects

Moody’s: U.S. medical device firms face soft organic growth prospects

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By Stewart Eisenhart, Emergo Group

U.S. medical device manufacturers dealing with lower market demand and rising pricing pressure will rely more on acquisitions and stock maneuverings to offset challenging growth prospects.

Moody’s Investor Service (via MarketWatch) anticipates slow sales for medical device firms over the next 12 to 18 months—especially for devices such as orthopedics used in elective procedures and cardiac products drawing more regulatory scrutiny due to safety and effectiveness concerns.

A weak global economy will necessitate share buy-backs, acquisitions and dividends by many firms in order to minimize losses, according to Moody’s. The ratings agency expects manufacturers to primarily borrow capital in order to fund such activities, which could negatively impact their credit standing.

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