Tuesday, Baird adjusted its outlook on Boston Scientific Corporation (NYSE:BSX) shares, increasing the price target to $100 from the previous $91 while maintaining an Outperform rating. The firm anticipates that Boston Scientific will surpass third-quarter expectations and adjust its guidance upwards, citing an estimated 14% year-over-year organic revenue growth and adjusted earnings per share of approximately $0.59.
The analyst from Baird predicts that a combination of third-quarter sequential revenue growth acceleration—expected to be at least 200-250 basis points—and an adjusted earnings per share beat of 3-5 cents would justify the current valuation of Boston Scientific's shares.
The company has experienced significant growth in the first half of 2024, with most business lines growing at or above market rates. The mid-first-quarter launch of Farapulse has been identified as a key factor contributing to the company's performance.
Boston Scientific's stock is trading at its highest valuation levels in over a decade, according to Baird. The continued rollout of Farapulse, along with the anticipated long-term benefits from the products PFA and WATCHMAN, whose OPTION trial data is expected in the fourth quarter of 2024, is thought to solidify Boston Scientific's position as a leading large-cap diversified medical technology company. The firm believes that these factors support a premium valuation multiple for Boston Scientific.
The analyst's comments reflect confidence in Boston Scientific's ability to maintain its growth trajectory and deliver financial results that could exceed market and analyst expectations. The positive outlook is based on the company's recent performance and strategic product launches, which are expected to contribute to revenue growth and earnings in the near term.
In other recent news, Boston Scientific Corporation has been the subject of several analyst ratings and significant developments. TD Cowen reaffirmed its Buy rating on Boston Scientific, expressing confidence in the upcoming Acurate IDE trial results, which could lead to the device's approval in the United States. The firm also highlighted Boston Scientific's commitment to delivering the trial data promptly, as indicated by the revised timeline for releasing the trial data.
Boston Scientific has also seen substantial increases in revenue and adjusted earnings per share for the second quarter, surpassing expectations. The acquisition of Silk Road Medical (NASDAQ:SILK) was completed, integrating the company's innovative transcarotid artery revascularization procedure into Boston Scientific's portfolio.
BofA Securities and Piper Sandler maintained their positive ratings on Boston Scientific's shares, reflecting confidence in the company's growth trajectory. Boston Scientific received approval from Japan's Pharmaceuticals and Medical Device Agency for its FARAPULSE Pulsed Field Ablation System, with plans to launch the system in Japan soon.
Furthermore, the U.S. Food and Drug Administration approved the expansion of the use of Boston Scientific's INGEVITY+ Pacing Leads for conduction system pacing and sensing in the left bundle branch area. The company is also preparing for the launches of the FARAVIEW software module and FARAWAVE Nav-enabled catheter later this year. These recent developments underscore Boston Scientific's ongoing commitment to innovation and growth.
InvestingPro Insights
Recent data from InvestingPro aligns with Baird's optimistic outlook on Boston Scientific Corporation (NYSE:BSX). The company's market capitalization stands at an impressive $128.93 billion, reflecting its strong position in the Healthcare Equipment & Supplies industry.
InvestingPro data shows that Boston Scientific's revenue growth remains robust, with a 13.65% increase in the last twelve months as of Q2 2024, and an even stronger 14.48% growth in Q2 2024 alone. This aligns with Baird's projection of 14% year-over-year organic revenue growth for the third quarter.
Two key InvestingPro Tips support the positive sentiment:
1. Net income is expected to grow this year, which could justify the current high valuation noted by Baird.
2. The company has shown a high return over the last year, with the stock price total return at an impressive 76.8% for the past year.
These insights complement Baird's analysis, suggesting that Boston Scientific's strong performance and growth prospects may indeed support its premium valuation. InvestingPro offers 16 additional tips for BSX, providing investors with a comprehensive view of the company's financial health and market position.
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