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Here's Why You Should Retain Boston Scientific (BSX) For Now
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Boston Scientific Corporation (BSX - Free Report) is gaining from new strategic investments. The robust performance of the WATCHMAN device instills optimism. However, unfavorable currency movements and stiff competition raise apprehension.
In the past year, the Zacks Rank #3 (Hold) stock has gained 8.7% against45.2% fall of the industry.
The renowned manufacturer of medical devices and products has a market capitalization of $65.65 billion. The company’s long-term projected growth of 10.3% compares with the industry’s growth projection of 13%.
Let’s delve deeper.
Factors At Play
Impressive Q3 Results: Boston Scientific ended the third quarter of 2022 with revenues surpassing the Zacks Consensus Estimate. Third-quarter 2022 total operational sales grew 14% and organic sales grew 11.5% year over year, exceeding the high end of the company’s guidance of 8-10%. The majority of the company’s business units rose double-digits organically and nearly all of the businesses and regions grew faster than their respective markets.
New Strategic Investments to Drive Electrophysiology: Investors are optimistic about Boston Scientific’s acquisition of Farapulse -- a leader in pulsed field ablation, an emerging field that has the potential to improve safety, efficacy, and ease of use for cardiac ablation procedures. This acquisition complements Boston Scientific’s electrophysiology portfolio to include the FARAPULSE Pulsed Field Ablation (PFA) System. In its fourth-quarter earnings call, the company noted that the early Farapulse launch has been progressing in Europe, as physicians remain enthusiastic about this technology’s safety and ease of use.
WATCHMAN, a Long-Term Growth Component: Boston Scientific’s structural heart programs are fast building momentum, banking on the strong performance of the WATCHMAN left atrial appendage closure device. In this regard, WATCHMAN recently received reimbursement in Japan. Also, the next generation WATCHMAN FLX is strongly capturing the European market.
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In the third quarter, Boston Scientific noted that WATCHMAN’s organic sales rose 26% year over year. Global growth remained strong supported by the FDA approval of an expanded label to include dual antiplatelet therapy (DAPT). This gave physicians and patients choice of DAPT or Oral anticoagulation (OAC) in the first 45 days post-implant. In terms of innovation, Boston Scientific is optimistic about Trusteer, the new steerable sheath and the next-generation FLX device, WATCHMAN FLX PRO.
Downsides
Forex Woes: With Boston Scientific recording 47% of its sales from the international market, it remains highly exposed to currency fluctuations. Unfavorable currency movements have been a major dampener over the last few quarters, as in the case of other important MedTech players too.
Competitive Landscape: The presence of many players has made the medical devices market highly competitive. Boston Scientific participates in several markets, including Cardiovascular, CRM, Endosurgery and Neuromodulation, where it faces competition from large, well-capitalized companies and several other smaller companies.
Estimate Trend
The Zacks Consensus Estimate for Boston Scientific’s 2022 earnings is pegged at $1.73, indicating a 6.1% increase from the 2021 reported number.
The Zacks Consensus Estimate for 2022 revenues is pegged at $12.68 billion, suggesting a 6.6% rise from the 2021 figure.
Key Picks
Some better-ranked stocks in the broader medical space that investors can consider are ShockWave Medical, Inc. (SWAV - Free Report) , Orthofix Medical Inc. (OFIX - Free Report) and Merit Medical System (MMSI - Free Report) .
ShockWave Medical, sporting a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 33.1% for 2023. The company’s earnings surpassed estimates in all the trailing four quarters, the average beat being 180.1%.
ShockWave Medical has outperformed its industry in the past year. SWAV has gained 35% against the industry’s 32.6% fall in the past year.
Orthofix Medical currently carrying a Zacks Rank #1 (Strong Buy), reported third-quarter 2022 adjusted EPS of 13 cents, which beat the Zacks Consensus Estimate by a stupendous 550%. Revenues of $114 million outpaced the consensus mark by 2.7%.
Orthofix Medical has an estimated next-year growth rate of 58.97%. MMSI’s earnings surpassed estimates in the trailing three quarters and missed in one, the average being 129.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Merit Medical, currently carrying a Zacks Rank of 2, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.
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Here's Why You Should Retain Boston Scientific (BSX) For Now
Boston Scientific Corporation (BSX - Free Report) is gaining from new strategic investments. The robust performance of the WATCHMAN device instills optimism. However, unfavorable currency movements and stiff competition raise apprehension.
In the past year, the Zacks Rank #3 (Hold) stock has gained 8.7% against45.2% fall of the industry.
The renowned manufacturer of medical devices and products has a market capitalization of $65.65 billion. The company’s long-term projected growth of 10.3% compares with the industry’s growth projection of 13%.
Let’s delve deeper.
Factors At Play
Impressive Q3 Results: Boston Scientific ended the third quarter of 2022 with revenues surpassing the Zacks Consensus Estimate. Third-quarter 2022 total operational sales grew 14% and organic sales grew 11.5% year over year, exceeding the high end of the company’s guidance of 8-10%. The majority of the company’s business units rose double-digits organically and nearly all of the businesses and regions grew faster than their respective markets.
New Strategic Investments to Drive Electrophysiology: Investors are optimistic about Boston Scientific’s acquisition of Farapulse -- a leader in pulsed field ablation, an emerging field that has the potential to improve safety, efficacy, and ease of use for cardiac ablation procedures. This acquisition complements Boston Scientific’s electrophysiology portfolio to include the FARAPULSE Pulsed Field Ablation (PFA) System. In its fourth-quarter earnings call, the company noted that the early Farapulse launch has been progressing in Europe, as physicians remain enthusiastic about this technology’s safety and ease of use.
WATCHMAN, a Long-Term Growth Component: Boston Scientific’s structural heart programs are fast building momentum, banking on the strong performance of the WATCHMAN left atrial appendage closure device. In this regard, WATCHMAN recently received reimbursement in Japan. Also, the next generation WATCHMAN FLX is strongly capturing the European market.
In the third quarter, Boston Scientific noted that WATCHMAN’s organic sales rose 26% year over year. Global growth remained strong supported by the FDA approval of an expanded label to include dual antiplatelet therapy (DAPT). This gave physicians and patients choice of DAPT or Oral anticoagulation (OAC) in the first 45 days post-implant. In terms of innovation, Boston Scientific is optimistic about Trusteer, the new steerable sheath and the next-generation FLX device, WATCHMAN FLX PRO.
Downsides
Forex Woes: With Boston Scientific recording 47% of its sales from the international market, it remains highly exposed to currency fluctuations. Unfavorable currency movements have been a major dampener over the last few quarters, as in the case of other important MedTech players too.
Competitive Landscape: The presence of many players has made the medical devices market highly competitive. Boston Scientific participates in several markets, including Cardiovascular, CRM, Endosurgery and Neuromodulation, where it faces competition from large, well-capitalized companies and several other smaller companies.
Estimate Trend
The Zacks Consensus Estimate for Boston Scientific’s 2022 earnings is pegged at $1.73, indicating a 6.1% increase from the 2021 reported number.
The Zacks Consensus Estimate for 2022 revenues is pegged at $12.68 billion, suggesting a 6.6% rise from the 2021 figure.
Key Picks
Some better-ranked stocks in the broader medical space that investors can consider are ShockWave Medical, Inc. (SWAV - Free Report) , Orthofix Medical Inc. (OFIX - Free Report) and Merit Medical System (MMSI - Free Report) .
ShockWave Medical, sporting a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 33.1% for 2023. The company’s earnings surpassed estimates in all the trailing four quarters, the average beat being 180.1%.
ShockWave Medical has outperformed its industry in the past year. SWAV has gained 35% against the industry’s 32.6% fall in the past year.
Orthofix Medical currently carrying a Zacks Rank #1 (Strong Buy), reported third-quarter 2022 adjusted EPS of 13 cents, which beat the Zacks Consensus Estimate by a stupendous 550%. Revenues of $114 million outpaced the consensus mark by 2.7%.
Orthofix Medical has an estimated next-year growth rate of 58.97%. MMSI’s earnings surpassed estimates in the trailing three quarters and missed in one, the average being 129.1%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Merit Medical, currently carrying a Zacks Rank of 2, reported third-quarter 2022 adjusted EPS of 64 cents, which beat the Zacks Consensus Estimate by 20.8%. Revenues of $287.2 million outpaced the consensus mark by 5.2%.
Merit Medical has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average being 25.4%.