On Wednesday, Evercore ISI updated its financial outlook for Boston Scientific Corporation (NYSE:BSX), increasing the price target to $82 from the previous $81, while maintaining an Outperform rating on the company's stock. The revision follows Boston Scientific's announcement of significant organic growth and earnings per share (EPS) improvement.
Boston Scientific reported approximately 14.7% organic growth and around 16% growth in EPS. Despite these robust figures, the company's shares experienced a 3% decline. Analysts at Evercore ISI attribute this drop to market expectations, noting it as an "expectations game" which they found surprising given the performance of similar stocks that met expectations.
The firm highlighted Boston Scientific's balanced geographical growth and the successful delivery on key growth drivers. A notable surge in the Electrophysiology (EP) segment was emphasized, with organic growth accelerating significantly due to the full commercial launch of Farapulse PFA in the U.S. This product alone significantly contributed to the revenue beat, with other franchises performing in line with expectations.
Management's confidence in the sustainability of this growth was underlined, especially with the overall organizational growth target being raised. The performance of the Watchman device, particularly in the U.S. market, was also better than expected, which is likely to mitigate concerns regarding a slowdown in the Structural Heart segment.
Evercore ISI expressed satisfaction with the margin leverage observed, as the EPS guidance was increased more than the revenue guidance. With the upcoming acquisitions of AXNX and SILK, Boston Scientific is expected to maintain its premium growth trajectory in the medium term. The revised price target of $82 reflects a low 30s price-to-earnings (P/E) blended average for fiscal years 2024 and 2025.
In other recent news, Boston Scientific reported second-quarter earnings that exceeded expectations, with a revenue of $4.12 billion and earnings per share (EPS) of $0.62. The company's strong performance led to an upgraded full-year 2024 guidance, including an EPS forecast of $2.38-$2.42. Citi has maintained its Buy rating on Boston Scientific, setting a price target of $90.
Boston Scientific also announced plans to acquire Silk Road Medical (NASDAQ:SILK) for $1.16 billion, a move aimed at expanding its vascular intervention market portfolio. Silk Road Medical is expected to generate revenues between $194 million and $198 million for the fiscal year 2024.
Several analysts have updated their ratings on Boston Scientific. TD Cowen increased its price target for the company from $77 to $86, maintaining a Buy rating. Truist Securities raised its price target to $90, based on projected earnings per share of $2.70 for the year 2025. Mizuho increased its price target from $90 to $100, citing the potential of the FARAPULSE product. These are recent developments for Boston Scientific.
InvestingPro Insights
As Boston Scientific Corporation (NYSE:BSX) garners attention with its organic growth and EPS improvement, InvestingPro data and tips provide additional insights. The company's market capitalization stands at a robust $113.32 billion, indicating a significant presence in the market. With a P/E ratio of 63.67, the company is trading at a premium, which is supported by a PEG ratio of 0.65, suggesting that its earnings growth could justify this valuation over the long term.
Moreover, Boston Scientific's revenue growth remains impressive, with a 12.74% increase over the last twelve months as of Q1 2024. This aligns with the company's reported organic growth figures and underpins the positive outlook from analysts. An InvestingPro Tip highlights that Boston Scientific is trading at a low P/E ratio relative to near-term earnings growth, which could attract investors looking for growth at a reasonable price. Additionally, the company's low price volatility may appeal to investors seeking stability in their portfolio.
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