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Here's Why You Should Retain Boston Scientific (BSX) Now
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Boston Scientific Corporation (BSX - Free Report) is well poised for growth in coming quarters backed by new value-added acquisitions. Robust performance of the WATCHMAN device instills investors’ optimism. However, unfavorable currency movements and stiff competition raise apprehension.
In the past year, this Zacks Rank #3 (Hold) stock has gained 7% against 37.5% fall of the industry and 11.1% fall of the S&P 500.
The renowned manufacturer of medical devices and products has a market capitalization of $65.34 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 Value-Adding Acquisitions: We are impressed with Boston Scientific’s several recent acquisitions that have added numerous products (though many are under development) with immense potential. These are likely to boost the top line in the long term.
The acquisition of Lumenis expands Boston Scientific’s Urology portfolio with its differentiated laser technology. Moreover, the acquisition of Preventice Solutions offers new-generation detection algorithms, a broad portfolio with BodyGuardian MINI and establishes a strong position for Boston Scientific in the field of cardiac diagnostics.
WATCHMAN, a Long-Term Growth Component: The company’s structural heart programs are fast building momentum banking on strong performance of the WATCHMAN left atrial appendage closure device. In this regard, WATCHMAN has recently received reimbursement in Japan. This apart, the next generation WATCHMAN FLX is strongly capturing the European market.
In the third quarter 2022, BSX noted that, WATCHMAN’s organic sales grew 26% year over year. Global growth remained strong supported by the FDA approval of an expanded label to include dual antiplatelet therapy (DAPT). This is giving physicians and patients choice of DAPT or Oral anticoagulation in the first 45 days post implant.
Image Source: Zacks Investment Research
In terms of innovation, Boston Scientific is optimistic about Trusteer, the new steerable sheath and the next-generation FLX device, WATCHMAN FLX PRO.
Long-Term Growth Goals Look Impressive: In 2019, the company provided a review of its long-term growth strategy, and offered plans for product pipeline and strategic investments. According to BSX, this is aimed at improving its clinical and economic outcomes, sustaining category leadership in served markets and expanding into high-growth, adjacent markets.
The plan focuses on spaces like category leadership strategy, product diversification into faster-growth markets, and expansion of portfolio and capabilities across geographies. Backed by the plan, the company expects to introduce approximately 75 products by 2022.
Downsides
Exposure to Currency Movement: 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 a large number of players has made the medical devices market highly competitive. The company participates in several markets, including Cardiovascular, CRM, Endosurgery and Neuromodulation, where it faces competition from large, well-capitalized companies such as Johnson & Johnson, Abbott, Medtronic, Stryker, Smith & Nephew and Edwards Lifesciences, apart from several other smaller companies.
Estimate Trend
The Zacks Consensus Estimate for Boston Scientific’s 2022 earnings is pegged at $1.73 per share, 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 are AMN Healthcare Services, Inc. (AMN - Free Report) , Orthofix Medical Inc. (OFIX - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
AMN Healthcare, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 3.3%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 10.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AMN Healthcare has lost 10.6% compared with the industry’s 30.3% decline in the past year.
Orthofix Medical, currently carrying a Zacks Rank #2, reported third-quarter 2022 adjusted EPS of 13 cents, which beat the Zacks Consensus Estimate by stupendous 550%. Revenues of $114 million outpaced the Zacks Consensus Estimate by 2.7%.
Orthofix Medical has an estimated next year growth rate of 58.97%. OFIX’s earnings surpassed the Zacks Consensus Estimate in the trailing three quarters and missed in one, the average being 129.1%.
Merit Medical, sporting a Zacks Rank #1 at present, has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 25.4%.
Merit Medical has gained 13.7% against the industry’s 8.7% decline over the past year.
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Here's Why You Should Retain Boston Scientific (BSX) Now
Boston Scientific Corporation (BSX - Free Report) is well poised for growth in coming quarters backed by new value-added acquisitions. Robust performance of the WATCHMAN device instills investors’ optimism. However, unfavorable currency movements and stiff competition raise apprehension.
In the past year, this Zacks Rank #3 (Hold) stock has gained 7% against 37.5% fall of the industry and 11.1% fall of the S&P 500.
The renowned manufacturer of medical devices and products has a market capitalization of $65.34 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 Value-Adding Acquisitions: We are impressed with Boston Scientific’s several recent acquisitions that have added numerous products (though many are under development) with immense potential. These are likely to boost the top line in the long term.
The acquisition of Lumenis expands Boston Scientific’s Urology portfolio with its differentiated laser technology. Moreover, the acquisition of Preventice Solutions offers new-generation detection algorithms, a broad portfolio with BodyGuardian MINI and establishes a strong position for Boston Scientific in the field of cardiac diagnostics.
WATCHMAN, a Long-Term Growth Component: The company’s structural heart programs are fast building momentum banking on strong performance of the WATCHMAN left atrial appendage closure device. In this regard, WATCHMAN has recently received reimbursement in Japan. This apart, the next generation WATCHMAN FLX is strongly capturing the European market.
In the third quarter 2022, BSX noted that, WATCHMAN’s organic sales grew 26% year over year. Global growth remained strong supported by the FDA approval of an expanded label to include dual antiplatelet therapy (DAPT). This is giving physicians and patients choice of DAPT or Oral anticoagulation in the first 45 days post implant.
Image Source: Zacks Investment Research
In terms of innovation, Boston Scientific is optimistic about Trusteer, the new steerable sheath and the next-generation FLX device, WATCHMAN FLX PRO.
Long-Term Growth Goals Look Impressive: In 2019, the company provided a review of its long-term growth strategy, and offered plans for product pipeline and strategic investments. According to BSX, this is aimed at improving its clinical and economic outcomes, sustaining category leadership in served markets and expanding into high-growth, adjacent markets.
The plan focuses on spaces like category leadership strategy, product diversification into faster-growth markets, and expansion of portfolio and capabilities across geographies. Backed by the plan, the company expects to introduce approximately 75 products by 2022.
Downsides
Exposure to Currency Movement: 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 a large number of players has made the medical devices market highly competitive. The company participates in several markets, including Cardiovascular, CRM, Endosurgery and Neuromodulation, where it faces competition from large, well-capitalized companies such as Johnson & Johnson, Abbott, Medtronic, Stryker, Smith & Nephew and Edwards Lifesciences, apart from several other smaller companies.
Estimate Trend
The Zacks Consensus Estimate for Boston Scientific’s 2022 earnings is pegged at $1.73 per share, 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 are AMN Healthcare Services, Inc. (AMN - Free Report) , Orthofix Medical Inc. (OFIX - Free Report) and Merit Medical Systems, Inc. (MMSI - Free Report) .
AMN Healthcare, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 3.3%. AMN’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 10.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AMN Healthcare has lost 10.6% compared with the industry’s 30.3% decline in the past year.
Orthofix Medical, currently carrying a Zacks Rank #2, reported third-quarter 2022 adjusted EPS of 13 cents, which beat the Zacks Consensus Estimate by stupendous 550%. Revenues of $114 million outpaced the Zacks Consensus Estimate by 2.7%.
Orthofix Medical has an estimated next year growth rate of 58.97%. OFIX’s earnings surpassed the Zacks Consensus Estimate in the trailing three quarters and missed in one, the average being 129.1%.
Merit Medical, sporting a Zacks Rank #1 at present, has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 25.4%.
Merit Medical has gained 13.7% against the industry’s 8.7% decline over the past year.