Here's Why You Should Add BSX Stock to Your Portfolio Now
Boston Scientific’s BSX growth is backed by its successful expansion of operations across different geographies outside the United States. Its recent acquisitions are expected to drive revenue growth in the long term. Consistent MedSurg market share gain is also highly encouraging. Meanwhile, headwinds such as currency movements raise concern for Boston Scientific.
In the past year, this Zacks Rank #2 (Buy) company’s shares have rallied 63.3% compared with the industry’s 26.5% growth and the S&P 500 composite’s 36.2% gain.
The renowned manufacturer of medical devices and products has a market capitalization of $123.41 billion. BSX has an estimated earnings growth rate of 17.1% for 2024 compared with the industry’s 12.6%. It beat on earnings in each of the trailing four quarters, delivering an average surprise of 7.18%.
Let’s delve deeper.
BSX’s Key Upsides
Continued International Expansion: Boston Scientific successfully continues with its expansion of operations across different geographies outside the United States. Within its international regions, the company is putting additional efforts to expand its foothold in the emerging markets (which are defined as all countries except the United States, Western and Central Europe, Japan, Australia, New Zealand and Canada), which hold strong growth potential based on their economic conditions, healthcare sectors and global capabilities.
In the second quarter of 2024, despite geopolitical weaknesses, emerging markets registered sturdy growth, primarily due to continued broad-based momentum across the company’s businesses and investment in these regions. During this period, emerging markets’ net sales grew nearly 19.3% on an operational basis, year over year.
In the second quarter, EMEA sales grew 16.1% year over year on an operational basis with robust performance in Europe within Electrophysiology. In line with this, the company enjoyed continued FARAPULSE account openings and robust utilization as well as growth in structural heart business following positive data presented on ACURATE Neo2. Within Asia Pacific, Boston Scientific is registering strong growth in Japan and China.
Impressive MedSurg Market Share Gain: Boston Scientific is consistently gaining market share within its MedSurg segment. In the second quarter, the company reported strong above-market growth contributions from Biliary franchise, led by high teen growth in AXIOS and the Endoluminal Surgery franchise. Within Urology, Boston Scientific continues to expand its market share globally.
Within Neuromodulation, Boston Scientific’s pain business is consistently gaining traction on the back of its innovative Alpha portfolio. Among the recent developments, the company’s SCS business is witnessing a solid ramp-up on improved U.S. trialing cadence in the second quarter. The company’s Brain and Pain franchises, too, are gaining traction, driven by new product launches in the United States and procedure recovery in Europe.
Image Source: Zacks Investment Research
Impressive Value-Adding Acquisitions: Boston Scientific’s recent acquisitions look impressive, with numerous product additions that have immense potential. This should help boost the top line in the long term.
In September 2024, Boston Scientific closed the acquisition of Silk Road Medical. This acquisition is expected to help the company progress in vascular medicine, where Silk Road has revolutionized stroke prevention and the treatment of carotid artery disease.
BSX’s Key Downsides
Exposure to Currency Movement: Boston Scientific records 40% of its sales from the international market. Therefore, it remains highly exposed to currency fluctuations. Unfavorable currency movements have been a major dampener over the past few quarters. In the second quarter, the company had a 160 basis-point impact on revenues from unfavorable currency fluctuations.
BSX’s Estimate Trend
The Zacks Consensus Estimate for 2024 earnings has remained unchanged at $2.40 per share in the past 30 days.
The consensus estimate for 2024 revenues is pegged at $16.26 billion, which indicates a 14.2% increase from the year-ago reported numbers.
Other Key Picks
Some other top-ranked stocks in the broader medical space are TransMedix Group TMDX, AxoGen AXGN and Phibro Animal Health PAHC.
TransMedix Group’s earnings are expected to surge 255.8% in 2024. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 287.5%. Shares of the company have risen 197.1% in the past year compared with the industry’s 22.7% growth. TMDX sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
AxoGen, carrying a Zacks Rank of 2 at present, has an earning yield of 94.1% compared with the industry’s 12.3%. Shares of the company have risen 180.6% compared with the industry’s 22.7% growth over the past year. AXGN’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 96.46%.
Phibro, carrying a Zacks Rank of 2 at present, has an estimated earnings growth rate of 21% for fiscal 2025 compared with the industry’s 12.6%. In the past year, shares of PAHC have risen 58.7% compared with the industry’s 24.2% growth. PAHC delivered a trailing four-quarter average earnings surprise of 4.10%.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Boston Scientific Corporation (BSX) : Free Stock Analysis Report
AxoGen, Inc. (AXGN) : Free Stock Analysis Report
Phibro Animal Health Corporation (PAHC) : Free Stock Analysis Report
TransMedics Group, Inc. (TMDX) : Free Stock Analysis Report