On Wednesday, Boston Scientific Corporation (NYSE:BSX) maintained its Buy rating and $84.00 price target from BTIG, following the announcement of its quarterly earnings. The company surpassed expectations with a second-quarter revenue of $4.1 billion, a year-over-year increase of 14.5% on a reported basis and 14.7% on an organic basis, along with an adjusted EPS of $0.62. These figures outperformed the consensus estimates of $4.021 billion in revenue and $0.58 in adjusted EPS, as well as the company's own sales growth guidance of 10.5-12.5%.
Boston Scientific's performance was bolstered by strong contributions from various business segments and geographic regions. Notably, the U.S. Electrophysiology sector saw a significant 218% year-over-year growth during the first full quarter following the launch of Farapulse in the U.S., exceeding expectations by approximately $93 million. Additionally, Baylis access products were used in a majority of U.S. Electrophysiology procedures.
The company's Watchman product also experienced robust growth, with a 20% year-over-year organic increase to $379 million, surpassing the consensus of $373 million. Other product segments like Peripheral Intervention, Endoscopy, and Urology/Pelvic Health continued to show high single-digit to low double-digit growth, aligning with consensus expectations.
Despite facing headwinds such as foreign exchange impacts and POLARx inventory charges, which led to a gross margin 30 basis points lower than consensus at 70.4%, Boston Scientific still reported operating margins of 27.2%, which was 50 basis points higher than consensus, aided by the sales outperformance.
Looking ahead, Boston Scientific raised its full-year revenue growth outlook to 13.5-14.5% year-over-year on a reported basis and 13-14% on an organic basis, an increase from the previous forecast of 11-13% and 10-12% respectively. The adjusted EPS outlook for the full year was also increased to $2.38-$2.42, up from the prior $2.29-$2.34 range. The guidance for the third quarter was set above consensus expectations.
BTIG's reiteration of the Buy rating and $84 price target reflects confidence in Boston Scientific's continued strong performance, driven by product launches, label expansions, and entry into new markets. The firm believes that the company's premium valuation multiple is justified by its consistent track record of exceeding sales guidance and operational efficiency.
In other recent news, Boston Scientific has been in the spotlight with several key developments. The company reported impressive second-quarter earnings with a revenue of $4.12 billion and earnings per share (EPS) of $0.62, exceeding expectations. Evercore ISI and Citi maintained their positive ratings on the company, revising their price targets to $82 and $90, respectively. TD Cowen also expressed confidence in the company's performance, raising its price target from $77 to $86.
Boston Scientific has announced plans to acquire Silk Road Medical (NASDAQ:SILK) for $1.16 billion, expanding its vascular intervention market portfolio. Silk Road Medical is projected to generate revenues between $194 million and $198 million for the fiscal year 2024.
The company's product, FARAPULSE, has gained attention with Mizuho increasing its price target from $90 to $100. This adjustment was based on interactions with numerous companies and key opinion leaders. Other analysts, including Truist Securities, Canaccord Genuity, and Goldman Sachs, have maintained their positive outlook on Boston Scientific. These are recent developments for Boston Scientific.
InvestingPro Insights
Boston Scientific Corporation's (NYSE:BSX) recent earnings report has highlighted its robust performance and upward trajectory. To further understand the company's financial health and market position, let's consider some key insights from InvestingPro. With a market capitalization of $113.59 billion and a high gross profit margin of 69.0% over the last twelve months as of Q1 2024, Boston Scientific demonstrates strong profitability and efficiency in its operations. Additionally, the company's revenue growth of 12.74% in the same period underscores its capacity for sustained expansion.
An InvestingPro Tip worth noting is that Boston Scientific is expected to see net income growth this year, which aligns with the positive outlook provided by BTIG. Moreover, the company is trading at a low P/E ratio relative to near-term earnings growth, suggesting that it might be undervalued given its growth prospects. These metrics, coupled with the fact that the company operates with a moderate level of debt, paint a favorable picture for potential investors.
For those interested in deeper analysis, InvestingPro offers additional tips on Boston Scientific, which can be accessed at: https://www.investing.com/pro/BSX. Subscribers can use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, unlocking further insights into the company's performance and market position. In total, there are 16 additional InvestingPro Tips available for Boston Scientific, providing a comprehensive overview for informed investment decisions.
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