On Friday, BofA Securities maintained a Buy rating on Boston Scientific (NYSE:BSX) with a consistent price target of $90.00. The firm's analysis suggests that Boston Scientific is poised to continue its strong performance relative to the medical technology (medtech) sector through 2025 and 2026. Despite the stock's significant year-to-date (YTD) increase of 44%, compared to the medtech sector's 11.7% rise, and the imminent competition from Affera, BofA Securities believes in the company's potential for sustained growth.
The confidence in Boston Scientific's outlook is based on the expectation that its mid-term revenue growth could exceed 10%. This growth rate is critical as it aligns with the current price-to-earnings (PE) multiple that investors are applying to the company. The firm's assessment indicates that as long as investors remain confident in this growth rate, the PE multiple should remain stable.
Boston Scientific's growth has not only been robust but also margin accretive, which means it contributes positively to profit margins. The firm anticipates that Boston Scientific's earnings per share (EPS) will compound at a faster rate than most other companies within their coverage universe. The company's financial performance has been notable, having been the best performing large-cap medtech stock in 2022, near the top in 2023, and leading once again in 2024.
The analyst's comments underscore the belief that Boston Scientific's winning streak is likely to continue, reinforcing the decision to maintain the Buy rating. This evaluation reflects a thorough reassessment of the original thesis and financial model for the company, resulting in even stronger conviction in its market position and growth prospects.
In other recent news, Boston Scientific Corporation (NYSE:BSX) has been making significant strides in its operations. The company has reported substantial increases in revenue and adjusted earnings per share for the second quarter, exceeding expectations. Analyst firms such as Baird, Canaccord Genuity, and Deutsche Bank have revised their price targets for Boston Scientific upward in response to these developments.
Boston Scientific has also completed its acquisition of Silk Road Medical (NASDAQ:SILK), incorporating its innovative transcarotid artery revascularization procedure into the company's portfolio. This move is expected to enhance growth prospects.
Furthermore, the U.S. Food and Drug Administration has 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 in the latter half of the year.
Investment firm Piper Sandler has maintained an Overweight rating and a $90.00 price target on Boston Scientific's shares, following a discussion with the company's management about the potential for significant market growth through the combined use of ablation and left atrial appendage closure technologies.
These developments are part of Boston Scientific's ongoing commitment to innovation and growth, as reflected in the company's raised full-year guidance for organic growth and adjusted EPS.
InvestingPro Insights
As Boston Scientific (NYSE:BSX) garners a favorable outlook from BofA Securities, InvestingPro data and tips provide additional context for investors. The company's market capitalization stands at a robust $122.35 billion, reflecting its significant presence in the healthcare equipment and supplies industry. With a P/E ratio currently at 66.38 and adjusted P/E for the last twelve months as of Q2 2024 at 59.07, Boston Scientific is trading at a low P/E ratio relative to near-term earnings growth, according to one of the InvestingPro Tips. This implies that the company may offer value relative to its earnings expansion potential.
Moreover, Boston Scientific's revenue growth has demonstrated a strong upward trajectory, with a 13.65% increase over the last twelve months as of Q2 2024. This aligns with the BofA Securities' expectation of mid-term revenue growth exceeding 10%. Another InvestingPro Tip highlights that the stock generally trades with low price volatility, which may appeal to investors seeking stability in their medtech investments. For those looking for further insights, there are additional InvestingPro Tips available at https://www.investing.com/pro/BSX, providing a comprehensive analysis of Boston Scientific's financial health and market position.
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