Canaccord Genuity maintained a Buy rating on Boston Scientific (NYSE:BSX) and increased the stock's price target to $98 from $88. The adjustment follows the successful acquisition of Silk Road Medical (NASDAQ:SILK), which was completed on September 17, 2024, for an enterprise value (EV) of $1.18 billion.
Silk Road Medical provided revenue guidance of $194 million to $198 million, indicating a 10%-12% growth after their first-quarter earnings in 2024. This forecast was later confirmed by Boston Scientific upon announcing the acquisition on June 18, 2024. With Silk Road's strong year-over-year revenue growth of 21% in the first quarter and 13% in the second quarter, the analyst at Canaccord Genuity projects a proforma revenue of $205 million. This projection includes an assumption of relatively stable revenue for the third and fourth quarters of the year for Silk Road.
The acquisition is expected to contribute an additional $55.5 million in net revenue for Boston Scientific in 2024, with $4.5 million anticipated in the third quarter and $51 million in the fourth quarter. For the year 2025, the estimated revenue addition is $221 million. According to management's earnings per share (EPS) guidance, the impact is expected to be immaterial to 2025 and accretive by 2026.
In light of these developments, Canaccord Genuity has maintained its adjusted EPS estimate for Boston Scientific at $2.41 for 2024. Additionally, the firm has slightly increased the 2025 EPS estimate by $0.01 to $2.68 and raised the annual forward EPS estimates by $0.04 per year to $2.99 and $3.34, reflecting the anticipated positive impact of the Silk Road Medical acquisition on Boston Scientific's financial performance in the coming years.
Boston Scientific Corporation (NYSE:BSX) has made significant strides in the medical technology industry. The company's recent earnings and revenue results surpassed second-quarter expectations, marking a major milestone. Additionally, Boston Scientific completed the acquisition of Silk Road Medical, further expanding its innovative portfolio. Analyst firms, including Stifel, Baird, and TD Cowen, have adjusted their outlooks on Boston Scientific, indicating confidence in the company's performance.
Boston Scientific has also received FDA approval of its FARAWAVE™ NAV Ablation Catheter and FARAVIEW™ Software, marking a significant advancement in the treatment of paroxysmal atrial fibrillation.
The company is also preparing for the anticipated results of the OPTION trial, which evaluates the potential market expansion for Boston Scientific's WATCHMAN device. Analysts from Stifel have increased their price target for Boston Scientific shares in anticipation of these results.
InvestingPro Insights
Boston Scientific's recent acquisition of Silk Road Medical aligns well with its strong financial performance and market position. According to InvestingPro data, the company's revenue growth stands at 13.65% for the last twelve months as of Q2 2024, with quarterly revenue growth at 14.48%. This robust growth trajectory supports Canaccord Genuity's optimistic outlook on the company's future performance.
InvestingPro Tips highlight that Boston Scientific is a prominent player in the Healthcare Equipment & Supplies industry, with net income expected to grow this year. The company's PEG ratio of 0.68 suggests that it may be undervalued relative to its growth prospects, which aligns with the analyst's bullish stance and increased price target.
It's worth noting that Boston Scientific has demonstrated impressive stock performance, with a one-year price total return of 75.96% and is currently trading near its 52-week high. This strong momentum, coupled with the strategic acquisition of Silk Road Medical, positions the company for potential continued growth.
Investors interested in a more comprehensive analysis can access 18 additional InvestingPro Tips for Boston Scientific, providing a deeper understanding of the company's financial health and market position.
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