Boston Scientific Corporation (BSX - Free Report) has been gaining investor confidence on consistently encouraging results. Over the past six months, the company’s share price has outperformed its industry. The stock has gained 27.1% compared with the industry’s 19% rally. Also, the company has outperformed the S&P 500’s 8.7% rise.
This developer, manufacturer, and marketer of medical devices for use in interventional medical specialties has a market cap of $51.58 billion. The company has an earnings growth rate of 10.4% for the next three to five years.
With solid prospects, this Zacks Rank #2 (Buy) stock is an attractive pick for investors at the moment.
The company’s estimate revision trend for the current year has been positive. In the past 60 days, two analysts have revised their estimates upward with no movement in the opposite direction. However, the Zacks Consensus Estimate remain unchanged at $1.39 in this period.
Let’s find out whether the recent positive trend is a sustainable one.
Solid Quarterly Performance
In the recent quarters, Boston Scientific has posted better-than-expected earnings and revenues. We are upbeat about the company witnessing growth across all business lines and geographies.
Strategic Buyouts to Fortify EP Business
During the last reported quarter, the company announced four compelling tuck-in acquisitions, Claret, Cryterion, nVision and Securus. These acquisitions target high-growth markets, enhance its category leadership strategy, leverage existing local capabilities and further enhance the company’s short-term and long-term growth profile. Earlier, the company announced acquisitions of NxThera and nVision in Urology and Pelvic Health, EmCision in Endoscopy, Securus in EP (Electrophysiology), and Millipede in Structural Heart. According to Boston Scientific, these acquisitions will lead to more than $16 billion in exciting new market expansion opportunities by 2021.
Emerging Market Expansion
An important part of Boston Scientific’s growth strategy is pursuing development opportunities in high-potential emerging markets like Brazil, Russia, India and China (BRIC). In second-quarter 2018, business from the emerging markets registered 21% growth led by strong growth in China. The company is currently looking forward to a much better performance ahead in China, banking on the recent approval of SYNERGY in this region. Also, in the last reported quarter, emerging market gain in Urology and Pelvic Health was strong, up 30% year over year.
Suspension of MedTech Tax
The decision by the U.S. House and Senate to suspend the medical device tax for another two years has come as a breather for medical device bigwigs like Boston Scientific. According to the company, although temporary, the suspension will allow it to continue with its plans to invest in innovative medical products. The company, meanwhile, has plans to work on the full repeal of the MedTech tax.
Other Stocks to Consider
Some other top-ranked stocks in the broader medical space are Intuitive Surgical (ISRG - Free Report) , Amedisys, Inc. (AMED - Free Report) and Masimo Corporation (MASI - Free Report) .
Intuitive Surgical’s long-term expected earnings growth rate is 14.7%. The stock currently carries a Zacks Rank of 2 (Buy).
Amedisys’ long-term expected earnings growth rate is 19.4%. The stock holds a Zacks Rank #2 at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Masimo’s long-term expected earnings growth rate is 14.8%. The stock has a Zacks Rank #2 at present.
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