Yahoo Finance Boston Scientific (BSX) Reaches 52-Week High: What's Aiding It?
Shares of Boston Scientific Corporation BSX scaled a new 52-week high of $74.94 on May 17, before closing the session marginally lower at $74.65.
Over the past year, this Zacks Rank #2 (Buy) stock has gained 40.7% against a 0.6% decline of the industry. The S&P 500 has witnessed 26.6% growth in the said time frame.
Over the past five years, the company registered earnings growth of 7.3% compared with the industry’s 3.9% rise. The company’s long-term expected growth rate of 12.5% compares with the industry’s growth projection of 10.9%. Boston Scientific’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 7.5%.
Boston Scientific is witnessing an upward trend in its stock price, prompted by its impressive market share gain in the MedSurg segment. The optimism led by a solid first-quarter 2024 performance and continued geographical expansion are expected to contribute further. However, a competitive landscape and exposure to currency movement continue to concern the company.
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Let’s delve deeper.
Key Growth Drivers
Geographic Expansion: Boston Scientific successfully continues with its expansion of operations across different geographies outside the United States, raising investors’ optimism. Within its international regions, the company is putting additional efforts to expand its foothold in emerging markets, which are holding strong growth potentials based on their economic conditions, healthcare sectors, and global capabilities.
In the first quarter of 2024, despite geopolitical weaknesses, emerging markets registered sturdy growth, primarily banking on continued broad-based momentum across the company’s business and investment in this region. During this period, emerging markets’ net sales were solid on an operational basis, year over year.
MedSurg Market Share Gain Impressive: Investors are upbeat about Boston Scientific’s consistent fast recovery within its MedSurg segment following the pandemic-led mayhem. The Endoscopy business within MedSurg is gaining from strong worldwide demand for its broad range of gastrointestinal and pulmonary treatment options.
In the first quarter of 2024, the company reported strong organic growth contribution from single-use imaging and AXIOS technologies. Endoscopy demonstrated notable strength in the United States, Latin America and the Asia-Pacific, with new product momentum and healthy procedure demand over the past few quarters.
Strong Q1 Results: Boston Scientific’s robust first-quarter 2024 results raise optimism. The company registered a strong year-over-year improvement in organic sales, indicating a solid rebound in the legacy businesses across all geographic regions despite all macroeconomic odds. Organic and operational revenues at its core business segments, barring Neuromodulation, also increased in the reported quarter.
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 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, Cardiac Rhythm Management, Endosurgery and Neuromodulation, where it faces competition from large and well-capitalized companies, apart from several other smaller companies.
Other Key Picks
A few other top-ranked stocks in the broader medical space are DaVita Inc. DVA, Veeva Systems Inc. VEEV and Ecolab Inc. ECL.
DaVita, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 13.6%. DVA’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 29.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DaVita’s shares have gained 39.8% compared with the industry’s 24.1% rise in the past year.
Veeva Systems, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 24.1%. VEEV’s earnings surpassed estimates in each of the trailing four quarters, with the average being 8.5%.
Veeva Systems has gained 27% compared with the industry’s 45.2% rise in the past year.
Ecolab, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 13.5%. ECL’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 1.3%.
Ecolab’s shares have rallied 35.8% against the industry’s 9.9% decline in the past year.
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Boston Scientific Corporation (BSX) : Free Stock Analysis Report
Ecolab Inc. (ECL) : Free Stock Analysis Report
DaVita Inc. (DVA) : Free Stock Analysis Report
Veeva Systems Inc. (VEEV) : Free Stock Analysis Report
