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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 the strong worldwide demand for its GI and pulmonary treatment options and traction in Europe for its next-generation WATCHMAN FLX. The 2023 guidance indicating strong growth over 2022 builds confidence in the stock. However, unfavorable currency movements and stiff competition are a concern.
In the past year, this Zacks Rank #3 (Hold) stock has gained 23.9% compared with the 4.9% fall of the industry and a 17.7% rise of the S&P 500.
The renowned manufacturer of medical devices and products has a market capitalization of $77.27 billion. The company’s long-term projected growth of 12.5% compares with the industry’s growth projection of 12.1%.
Let’s delve deeper.
Factors At Play
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. 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.
In the third quarter of 2023, WATCHMAN’s organic sales grew 23.3% year over year. The U.S. demand remained strong and international growth was led by China and Japan. Our estimate suggests a 21% improvement in the company's Watchman revenue in 2023.
Geographic Expansion Continues: Boston Scientific successfully continues with its expansion of operations across different geographies outside the United States. In 2022, 40% of the company’s consolidated revenues came from international regions.
In Europe, Middle East and Africa (EMEA), Boston Scientific is expanding its base banking on its diverse portfolio, new launches and commercial execution with healthy underlying market demand. In the third quarter, EMEA sales rose 10.9% year over year on an operational basis, with double-digit growth in seven of the company’s eight business units. The company is excited about 2023 and expects to deliver double-digit growth within this region.
Upbeat Guidance: For the full year, net sales growth is expected to be approximately 11% on a reported and organic basis (earlier estimate was 10.5-11.5% reported growth and 10-11% organic growth).
Full-year adjusted earnings per share are expected in the range of $1.99-$2.02 (previous guided range was $1.96 to $2.00). The Zacks Consensus Estimate is currently pegged at $1.99.
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For the fourth quarter of 2023, revenue growth is projected in the range of 9-11% on a reported basis (up 8-10% organically). Adjusted earnings are expected in the range of 49-52 cents per share.
Downsides
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.
Exposure to Currency Movement: With Boston Scientific recording 40% of its sales from the international market, it is 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.
In 2023, the company expects an approximate 100 basis-point headwind from foreign exchange on revenues.
Estimate Trend
The Zacks Consensus Estimate for Boston Scientific’s 2023 earnings is pegged at $2.01 per share, indicating a 17.5% increase from the 2022 reported number.
The Zacks Consensus Estimate for 2023 revenues is pegged at $14.10 billion, suggesting an 11.2% rise from the 2022 figure.
Key Picks
Some better-ranked stocks in the broader medical space are Abbott Laboratories (ABT - Free Report) , Inari Medical (NARI - Free Report) and Integer Holdings Corporation (ITGR - Free Report) .
Abbott, carrying a Zacks Rank of 2 (Buy), reported adjusted EPS of $1.14 in third-quarter 2023, beating the Zacks Consensus Estimate by 3.6%. Revenues of $10.14 billion outpaced the consensus mark by 3.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Abbott has a long-term estimated growth rate of 5.1%. ABT’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 6.8%.
Inari Medical, carrying a Zacks Rank #2, reported adjusted EPS of 4 cents in third-quarter 2023, beating the Zacks Consensus Estimate by 128.6%. Revenues of $119 million outpaced the consensus estimate by 2.3%.
Inari Medical has an estimated earnings growth rate of 725% for the following year. Inari Medical’s earnings surpassed estimates in all the trailing four quarters, the average being 66.8%.
Integer Holdings reported a third-quarter 2023 adjusted EPS of $1.27, beating the Zacks Consensus Estimate by 20.9%. Revenues of $404.7 million surpassed the Zacks Consensus Estimate by 8.7%. It currently carries a Zacks Rank #2.
Integer Holdings has a long-term estimated growth rate of 15.8%. ITGR’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 11.9%.
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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 the strong worldwide demand for its GI and pulmonary treatment options and traction in Europe for its next-generation WATCHMAN FLX. The 2023 guidance indicating strong growth over 2022 builds confidence in the stock. However, unfavorable currency movements and stiff competition are a concern.
In the past year, this Zacks Rank #3 (Hold) stock has gained 23.9% compared with the 4.9% fall of the industry and a 17.7% rise of the S&P 500.
The renowned manufacturer of medical devices and products has a market capitalization of $77.27 billion. The company’s long-term projected growth of 12.5% compares with the industry’s growth projection of 12.1%.
Let’s delve deeper.
Factors At Play
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. 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.
In the third quarter of 2023, WATCHMAN’s organic sales grew 23.3% year over year. The U.S. demand remained strong and international growth was led by China and Japan. Our estimate suggests a 21% improvement in the company's Watchman revenue in 2023.
Geographic Expansion Continues: Boston Scientific successfully continues with its expansion of operations across different geographies outside the United States. In 2022, 40% of the company’s consolidated revenues came from international regions.
In Europe, Middle East and Africa (EMEA), Boston Scientific is expanding its base banking on its diverse portfolio, new launches and commercial execution with healthy underlying market demand. In the third quarter, EMEA sales rose 10.9% year over year on an operational basis, with double-digit growth in seven of the company’s eight business units. The company is excited about 2023 and expects to deliver double-digit growth within this region.
Upbeat Guidance: For the full year, net sales growth is expected to be approximately 11% on a reported and organic basis (earlier estimate was 10.5-11.5% reported growth and 10-11% organic growth).
Full-year adjusted earnings per share are expected in the range of $1.99-$2.02 (previous guided range was $1.96 to $2.00). The Zacks Consensus Estimate is currently pegged at $1.99.
For the fourth quarter of 2023, revenue growth is projected in the range of 9-11% on a reported basis (up 8-10% organically). Adjusted earnings are expected in the range of 49-52 cents per share.
Downsides
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.
Exposure to Currency Movement: With Boston Scientific recording 40% of its sales from the international market, it is 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.
In 2023, the company expects an approximate 100 basis-point headwind from foreign exchange on revenues.
Estimate Trend
The Zacks Consensus Estimate for Boston Scientific’s 2023 earnings is pegged at $2.01 per share, indicating a 17.5% increase from the 2022 reported number.
The Zacks Consensus Estimate for 2023 revenues is pegged at $14.10 billion, suggesting an 11.2% rise from the 2022 figure.
Key Picks
Some better-ranked stocks in the broader medical space are Abbott Laboratories (ABT - Free Report) , Inari Medical (NARI - Free Report) and Integer Holdings Corporation (ITGR - Free Report) .
Abbott, carrying a Zacks Rank of 2 (Buy), reported adjusted EPS of $1.14 in third-quarter 2023, beating the Zacks Consensus Estimate by 3.6%. Revenues of $10.14 billion outpaced the consensus mark by 3.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Abbott has a long-term estimated growth rate of 5.1%. ABT’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 6.8%.
Inari Medical, carrying a Zacks Rank #2, reported adjusted EPS of 4 cents in third-quarter 2023, beating the Zacks Consensus Estimate by 128.6%. Revenues of $119 million outpaced the consensus estimate by 2.3%.
Inari Medical has an estimated earnings growth rate of 725% for the following year. Inari Medical’s earnings surpassed estimates in all the trailing four quarters, the average being 66.8%.
Integer Holdings reported a third-quarter 2023 adjusted EPS of $1.27, beating the Zacks Consensus Estimate by 20.9%. Revenues of $404.7 million surpassed the Zacks Consensus Estimate by 8.7%. It currently carries a Zacks Rank #2.
Integer Holdings has a long-term estimated growth rate of 15.8%. ITGR’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 11.9%.