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Here's Why You Should Buy Boston Scientific (BSX) Stock
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Boston Scientific Corporation (BSX - Free Report) is gaining from strong improvement in organic sales, indicating a solid rebound in the legacy business despite several macroeconomic issues. The raised 2023 guidance increases investors’ confidence, indicating that the company is well-poised to handle the industry-wise trend. However, unfavorable currency movements and stiff competition are a concern.
In the past year, this Zacks Rank #2 (Buy) stock has gained 49.7% against a 19.1% plunge of the industry and a 19.1% rise of the S&P 500.
The renowned manufacturer of medical devices and products has a market capitalization of $78.09 billion. The company’s long-term projected growth of 11.5%.
Let’s delve deeper.
Factors At Play
MedSurg Market Share Gain Impressive: Following the pandemic-led mayhem, Boston Scientific registered faster recovery within the MedSurg segment than rest of its business arms.
Within Urology, BSX continues to expand market share globally. In the first quarter, sales increased 16% year over year organically. All franchises grew double digits, fueled by strength in key products including LithoVue and Rezum.
In Endoscopy, sales increased 11% organically with broad-based strength across all regions and franchises. The company’s single-use imaging franchise grew double digits. Within Nuromodulation, organic growth was 14% in the reported quarter. Boston Scientific’s pain business grew high single digits, with strong SCS performance driven by its innovative Alpha portfolio with fast therapy in cognitive suite of digital tools supporting patient activation.
Impressive Value-Adding Acquisitions: We are impressed with Boston Scientific’s recent acquisitions that have added numerous products (though many are under development) with immense potential. This, in turn, will likely boost the top line in the long term.
In April 2023, Boston Scientific closed the Apollo Endosurgery acquisition, which furthers the company’s category leadership strategy within the growing area of endoluminal surgery with differentiated technologies like OverStitch and xTAC along with an entry into the adjacent endobariatric market.
In February 2023, the company closed its majority stake investment in Acotec (a local Chinese company and prominent name in the field of drug-coated balloons in the region and many other peripheral and potentially cardiology procedures). This helped BSX fortify its presence in the Chinese market. It continues to expect double digit growth in China for the full year.
Image Source: Zacks Investment Research
Raised Guidance: Boston Scientific updated its full-year guidance and provided second-quarter 2023 projections. Full-year net sales growth is expected in the range of 8.5-10.5% on a reported basis (earlier estimate was 5-7% growth). Net sales growth is expected in the range of 8-10% on an organic basis. The full-year adjusted earnings per share is expected in the range of $1.90-$1.96. For the second quarter of 2023, revenue growth is projected in the range of 6.5-8.5% on a reported basis (suggesting an increase of 7-9% organically). Adjusted earnings are expected in the range of 48-50 cents per share.
Downsides
Exposure to Currency Movement: With Boston Scientific generating 47% of its sales from the international market, it continues to be 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 Trends
The Zacks Consensus Estimate for Boston Scientific’s 2023 earnings is pegged at $1.95 per share, indicating a 2.6% increase from the 2022 reported number.
The Zacks Consensus Estimate for 2023 revenues is pegged at $13.89 billion, suggesting a 9.5% rise from the 2022 figure.
Other Key Picks
A few other top-ranked stocks in the broader medical space are CONMED (CNMD - Free Report) , Merit Medical Systems, Inc. (MMSI - Free Report) and Dentsply Sirona (XRAY - Free Report) .
CONMED, carrying Zacks Rank #2, has an estimated long-term growth rate of 19.4%. The company’s earnings surpassed estimates in two of the trailing four quarters, missed once and met in another, recording a negative average surprise of 10.54%.
Merit Medical, currently carrying a Zacks Rank #2, has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 20.2%.
Merit Medical has improved 59.9% compared with the industry’s 22.8% growth over the past year.
Dentsply Sirona, carrying a Zacks Rank #2, has an estimated long-term growth rate of 9.1%. XRAY delivered a trailing four-quarter average earnings surprise of 10.47%.
The company’s shares have rallied 25.2% year to date compared with the industry’s 12.5% growth.
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Here's Why You Should Buy Boston Scientific (BSX) Stock
Boston Scientific Corporation (BSX - Free Report) is gaining from strong improvement in organic sales, indicating a solid rebound in the legacy business despite several macroeconomic issues. The raised 2023 guidance increases investors’ confidence, indicating that the company is well-poised to handle the industry-wise trend. However, unfavorable currency movements and stiff competition are a concern.
In the past year, this Zacks Rank #2 (Buy) stock has gained 49.7% against a 19.1% plunge of the industry and a 19.1% rise of the S&P 500.
The renowned manufacturer of medical devices and products has a market capitalization of $78.09 billion. The company’s long-term projected growth of 11.5%.
Let’s delve deeper.
Factors At Play
MedSurg Market Share Gain Impressive: Following the pandemic-led mayhem, Boston Scientific registered faster recovery within the MedSurg segment than rest of its business arms.
Within Urology, BSX continues to expand market share globally. In the first quarter, sales increased 16% year over year organically. All franchises grew double digits, fueled by strength in key products including LithoVue and Rezum.
In Endoscopy, sales increased 11% organically with broad-based strength across all regions and franchises. The company’s single-use imaging franchise grew double digits. Within Nuromodulation, organic growth was 14% in the reported quarter. Boston Scientific’s pain business grew high single digits, with strong SCS performance driven by its innovative Alpha portfolio with fast therapy in cognitive suite of digital tools supporting patient activation.
Impressive Value-Adding Acquisitions: We are impressed with Boston Scientific’s recent acquisitions that have added numerous products (though many are under development) with immense potential. This, in turn, will likely boost the top line in the long term.
In April 2023, Boston Scientific closed the Apollo Endosurgery acquisition, which furthers the company’s category leadership strategy within the growing area of endoluminal surgery with differentiated technologies like OverStitch and xTAC along with an entry into the adjacent endobariatric market.
In February 2023, the company closed its majority stake investment in Acotec (a local Chinese company and prominent name in the field of drug-coated balloons in the region and many other peripheral and potentially cardiology procedures). This helped BSX fortify its presence in the Chinese market. It continues to expect double digit growth in China for the full year.
Raised Guidance: Boston Scientific updated its full-year guidance and provided second-quarter 2023 projections. Full-year net sales growth is expected in the range of 8.5-10.5% on a reported basis (earlier estimate was 5-7% growth). Net sales growth is expected in the range of 8-10% on an organic basis. The full-year adjusted earnings per share is expected in the range of $1.90-$1.96. For the second quarter of 2023, revenue growth is projected in the range of 6.5-8.5% on a reported basis (suggesting an increase of 7-9% organically). Adjusted earnings are expected in the range of 48-50 cents per share.
Downsides
Exposure to Currency Movement: With Boston Scientific generating 47% of its sales from the international market, it continues to be 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 Trends
The Zacks Consensus Estimate for Boston Scientific’s 2023 earnings is pegged at $1.95 per share, indicating a 2.6% increase from the 2022 reported number.
The Zacks Consensus Estimate for 2023 revenues is pegged at $13.89 billion, suggesting a 9.5% rise from the 2022 figure.
Other Key Picks
A few other top-ranked stocks in the broader medical space are CONMED (CNMD - Free Report) , Merit Medical Systems, Inc. (MMSI - Free Report) and Dentsply Sirona (XRAY - Free Report) .
CONMED, carrying Zacks Rank #2, has an estimated long-term growth rate of 19.4%. The company’s earnings surpassed estimates in two of the trailing four quarters, missed once and met in another, recording a negative average surprise of 10.54%.
CNMD’s shares have risen 52.9% in the past year compared with the industry’s 22.8% growth. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Merit Medical, currently carrying a Zacks Rank #2, has an estimated long-term growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 20.2%.
Merit Medical has improved 59.9% compared with the industry’s 22.8% growth over the past year.
Dentsply Sirona, carrying a Zacks Rank #2, has an estimated long-term growth rate of 9.1%. XRAY delivered a trailing four-quarter average earnings surprise of 10.47%.
The company’s shares have rallied 25.2% year to date compared with the industry’s 12.5% growth.