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Here's Why You Should Invest in Boston Scientific (BSX) Now
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Boston Scientific Corporation (BSX - Free Report) is gaining from consistent growth in the legacy business across several geographies, even amid macroeconomic issues. The next generation WATCHMAN FLX is capturing the European market. Acquisitions, too are contributing to the topline. The increased 2023 guidance indicates that the company is well-poised to handle the industry-wise trend of currency headwinds and global inflationary pressure. However, unfavorable currency movements and stiff competition are a concern.
In the past year, this Zacks Rank #3 (Hold) stock has gained 35.9% compared with the 0.2% fall of the industry and a 22.2% rise of the S&P 500.
The renowned manufacturer of medical devices and products has a market capitalization of $78.78 billion. The company’s long-term projected growth of 12.8% compares with the industry’s growth projection of 13.8%.
Let’s delve deeper.
Factors At Play
Geographic Expansion Continues: Boston Scientific successfully expands operations across different geographies outside the United States. In 2022, 40% of the company’s consolidated revenues came from international regions. In the second quarter, EMEA sales grew 9% year over year on an operational basis, with double-digit growth in four of the company’s five major markets in Europe. Across the portfolio, Boston Scientific saw strength in new and ongoing product launches, including FARAPULSE, POLARx, ACURATE neo2 and LUX-DX. The company remains excited about the year ahead and expects to continue to outpace its peers within the EMEA market.
WATCHMAN, a Long-Term Growth Component: Boston Scientific’s structural heart programs are fast building momentum, banking on the solid performance of the WATCHMAN left atrial appendage closure device. WATCHMAN is the first device to offer a non-pharmacologic alternative to oral anti-coagulants that has been studied in a randomized clinical trial and is the leading device in percutaneous LAAC globally. The next generation WATCHMAN FLX is strongly capturing the European market.
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In the second quarter of 2023, Boston Scientific noted that WATCHMAN’s organic sales grew 27% year over year. The U.S. demand remained strong and international growth was led by China and Japan. Our estimate suggests an 8.3% improvement in the company's Watchman revenue in 2023.
Upbeat Guidance: Boston Scientific’s full-year net sales growth is expected in the range of 10.5-11.5% on a reported basis (earlier estimate was 8.5-10.5% growth). Net sales growth is expected to be in the range of 10-11% on an organic basis (8-10%).
Full-year adjusted earnings per share is expected to be $1.96 to $2.00 ($1.90 to $1.96). The Zacks Consensus Estimate is currently pegged at $1.95, below the guidance.
For the third quarter of 2023, revenue growth is projected in the range of approximately 8.5-10.5% on a reported basis (an increase of 7-9% organically). Adjusted earnings are expected to be 46-48 cents per share.
Downsides
Exposure to Currency Movement: With Boston Scientific recording 40% of its sales from the international market, it remains highly exposed to currency fluctuations. Unfavorable currency movements have been a significant dampener over the last few quarters, as with other important MedTech players.
Competitive Landscape: The presence of many 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 2023 earnings is pegged at $1.99 per share, indicating a 16.4% increase from the 2022 reported number.
The Zacks Consensus Estimate for 2023 revenues is pegged at $14.07 billion, suggesting a 10.9% rise from the 2022 figure.
Key Picks
Some other top-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , Quanterix (QTRX - Free Report) and Align Technology (ALGN - Free Report) , each carrying a Zacks Rank #2.
DaVita has gained 25.5% against the industry’s 8.9% decline in the past year.
Estimates for Quanterix’s 2023 loss per share have remained constant at 97 cents in the past 30 days. Shares of the company have surged 141.5% in the past year compared with the industry’s fall of 5.6%.
QTRX’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 30.39%. In the last reported quarter, it posted an earnings surprise of 55.56%.
Estimates for Align Technology’s 2023 earnings have moved up from $8.77 to $8.78 per share in the past 30 days. Shares of the company have increased 27% in the past year compared with the industry’s rise of 14.3%.
ALGN’s earnings beat estimates in three of the trailing four quarters and missed in one. In the last reported quarter, it posted an earnings surprise of 9.90%.
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Here's Why You Should Invest in Boston Scientific (BSX) Now
Boston Scientific Corporation (BSX - Free Report) is gaining from consistent growth in the legacy business across several geographies, even amid macroeconomic issues. The next generation WATCHMAN FLX is capturing the European market. Acquisitions, too are contributing to the topline. The increased 2023 guidance indicates that the company is well-poised to handle the industry-wise trend of currency headwinds and global inflationary pressure. However, unfavorable currency movements and stiff competition are a concern.
In the past year, this Zacks Rank #3 (Hold) stock has gained 35.9% compared with the 0.2% fall of the industry and a 22.2% rise of the S&P 500.
The renowned manufacturer of medical devices and products has a market capitalization of $78.78 billion. The company’s long-term projected growth of 12.8% compares with the industry’s growth projection of 13.8%.
Let’s delve deeper.
Factors At Play
Geographic Expansion Continues: Boston Scientific successfully expands operations across different geographies outside the United States. In 2022, 40% of the company’s consolidated revenues came from international regions.
In the second quarter, EMEA sales grew 9% year over year on an operational basis, with double-digit growth in four of the company’s five major markets in Europe. Across the portfolio, Boston Scientific saw strength in new and ongoing product launches, including FARAPULSE, POLARx, ACURATE neo2 and LUX-DX. The company remains excited about the year ahead and expects to continue to outpace its peers within the EMEA market.
WATCHMAN, a Long-Term Growth Component: Boston Scientific’s structural heart programs are fast building momentum, banking on the solid performance of the WATCHMAN left atrial appendage closure device. WATCHMAN is the first device to offer a non-pharmacologic alternative to oral anti-coagulants that has been studied in a randomized clinical trial and is the leading device in percutaneous LAAC globally. The next generation WATCHMAN FLX is strongly capturing the European market.
In the second quarter of 2023, Boston Scientific noted that WATCHMAN’s organic sales grew 27% year over year. The U.S. demand remained strong and international growth was led by China and Japan. Our estimate suggests an 8.3% improvement in the company's Watchman revenue in 2023.
Upbeat Guidance: Boston Scientific’s full-year net sales growth is expected in the range of 10.5-11.5% on a reported basis (earlier estimate was 8.5-10.5% growth). Net sales growth is expected to be in the range of 10-11% on an organic basis (8-10%).
Full-year adjusted earnings per share is expected to be $1.96 to $2.00 ($1.90 to $1.96). The Zacks Consensus Estimate is currently pegged at $1.95, below the guidance.
For the third quarter of 2023, revenue growth is projected in the range of approximately 8.5-10.5% on a reported basis (an increase of 7-9% organically).
Adjusted earnings are expected to be 46-48 cents per share.
Downsides
Exposure to Currency Movement: With Boston Scientific recording 40% of its sales from the international market, it remains highly exposed to currency fluctuations. Unfavorable currency movements have been a significant dampener over the last few quarters, as with other important MedTech players.
Competitive Landscape: The presence of many 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 2023 earnings is pegged at $1.99 per share, indicating a 16.4% increase from the 2022 reported number.
The Zacks Consensus Estimate for 2023 revenues is pegged at $14.07 billion, suggesting a 10.9% rise from the 2022 figure.
Key Picks
Some other top-ranked stocks in the broader medical space are DaVita Inc. (DVA - Free Report) , Quanterix (QTRX - Free Report) and Align Technology (ALGN - Free Report) , each carrying a Zacks Rank #2.
DaVita has an estimated long-term growth rate of 12.7%. DVA’s earnings surpassed estimates in three of the trailing four quarters and missed once, with an average surprise of 21.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DaVita has gained 25.5% against the industry’s 8.9% decline in the past year.
Estimates for Quanterix’s 2023 loss per share have remained constant at 97 cents in the past 30 days. Shares of the company have surged 141.5% in the past year compared with the industry’s fall of 5.6%.
QTRX’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 30.39%. In the last reported quarter, it posted an earnings surprise of 55.56%.
Estimates for Align Technology’s 2023 earnings have moved up from $8.77 to $8.78 per share in the past 30 days. Shares of the company have increased 27% in the past year compared with the industry’s rise of 14.3%.
ALGN’s earnings beat estimates in three of the trailing four quarters and missed in one. In the last reported quarter, it posted an earnings surprise of 9.90%.