Yahoo Finance Boston Scientific (BSX) Rises 26.4%: Will the Rally Continue?
Boston Scientific, Inc. BSX appears in good shape, with its shares rallying 26.4% in the past year. The company is gaining from strong improvement in organic sales, indicating a solid rebound in the legacy business. The raised 2023 guidance increases investors’ confidence, indicating that the company is well-poised to handle the industry-wise trend of currency headwinds and global inflationary pressure.
The Zacks Rank #2 (Buy) stock has outperformed its industry’s decline of 31.2% in the past year.
What’s Aiding Boston Scientific?
Q1 Upsides: Boston Scientific ended the first quarter of 2023, with better-than-expected earnings and revenues. The company registered a year-over-year improvement in organic sales, indicating a strong rebound in the legacy business even amid several macroeconomic issues. Organic revenues at each of its core business segments and geographies were up in the reported quarter.
Geographically, The United States registered an increase of 13% year over year operationally, inclusive of a 140 basis-point tailwind from the Baylis acquisition with notable organic strength across each business units. Europe, Middle East and Africa (EMEA) registered a rise of 20% on an operational basis, with nearly every market growing double digits in the quarter. The above-market growth is driven by Boston Scientific’s diverse portfolio, new launches and commercial execution with healthy underlying market demand.
Impressive Value-Adding Acquisitions: We are impressed with Boston Scientific’s several 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.
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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), further expanding its presence in China and continues to expect double-digit growth for the full year.
WATCHMAN, a Long-Term Growth Component: Boston Scientific’s structural heart programs are fast building momentum banking on strong performance of the WATCHMAN left atrial appendage closure device. the next generation WATCHMAN FLX is strongly capturing the European market.
In the first quarter, Boston Scientific noted that, WATCHMAN’s organic sales grew 29% year over year. 2. In the first quarter, demand remained robust for WATCHMAN FLX and by the time of the earnings release, the company treated more than 300,000 patients globally since launch. Boston Scientific is constantly investing in this business for future growth through product innovation, solutions and clinical evidence. The company expects double-digit growth within WATCHMAN in 2023, fueled by innovation, ongoing clinical evidence and strong commercial execution.
What’s Ahead for the Stock?
Boston Scientific is expected to continue to outpace its peers within the EMEA market with broad based strength across all major markets and business units. The receipt of health sciences authority approval for FARAPULSE in Singapore is likely to contribute to the company’s future growth. The launch of AGENT Drug-Coated Balloon in Japan and the solid procedural demand as hospitals work through COVID delayed procedures in China are expected to boost company’s performance in coming quarters.
For 2023, Boston Scientific net sales growth is expected in the range of 8.5-10.5% on a reported basis and adjusted earnings per share is expected in the range of $1.90-$1.96.
Estimate Trends
In the past 90 days, the Zacks Consensus Estimate for company’s 2023 earnings moved 2.6% north to $1.95.
The Zacks Consensus Estimate for 2023 revenues is pegged at $13.89 billion, suggesting a 9.5% growth from 2022 levels.
Key Picks
Some better-ranked stocks in the broader medical space are Addus Homecare Corporation ADUS, Merit Medical Systems, Inc. MMSI and Hologic, Inc. HOLX.
The Zacks Consensus Estimate for Addus Homecare’s 2023 earnings indicates a 10.9% year-over-year growth. The Zacks Consensus Estimate for ADUS’s 2023 earnings has moved 0.5% north in the past 30 days.
Addus Homecare has a long-term estimated growth rate of 11.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Merit Medical reported a first-quarter 2023 adjusted EPS of 64 cents, beating the Zacks Consensus Estimate by 16.4%. Revenues of $297.6 million surpassed the Zacks Consensus Estimate by 5.9%. It currently carries a Zacks Rank #2.
Merit Medical has a long-term estimated growth rate of 11%. MMSI’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 20.2%.
Hologic, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 5.1% for fiscal 2024. HOLX’s earnings surpassed estimates in all the trailing four quarters, the average being 27.3%.
Hologic has gained 5% against the industry’s 2.2% decline in the past year.
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