7) Boston Scientific Corporation (NYSE:BSX)
Share Price as of August 16, 2024: US$78.25
Average Upside Potential: 12.46%
Boston Scientific Corporation (NYSE:BSX) produces products for use in angioplasty, blood clot filtration, cardiac rhythm management, catheter-directed ultrasound imaging, structural heart disease, interventional oncology, and treatment of incontinence.
The company’s growth prospects stem from the differentiated products in electrophysiology and structural heart devices. More importantly, Wall Street analysts are more optimistic about the emerging field of PFA, an area where it is well-placed. Earlier, doctors have used temperature-based methods to disable heart tissue, which is responsible for fluctuating heartbeats.
The problem with temperature-based methods includes the probability of damaging the surrounding tissue. On the other hand, PFA is dependent on electricity to disable aberrant tissue. Since different tissues have different electrical thresholds, this procedure can help in selectively sparing the surrounding tissue. In 2Q 2024, Boston Scientific Corporation (NYSE:BSX) saw net sales of $4.120 billion, exhibiting an increase of 14.5% YoY on a reported basis, and ~16.1% YoY on an operational basis. Its GAAP net income was $324 million or $0.22 per share (EPS) as compared to $261 million or $0.18 per share in the year-ago period.
Boston Scientific Corporation (NYSE:BSX) has a wide economic moat, given its strong brand reputation, well-established and stable customer relationships, and prominent global presence. Apart from these competitive advantages, the company’s strategic focus on critical growth areas, like minimally invasive procedures and emerging markets, should continue to offer opportunities for continued expansion and differentiation.
Also, the company deploys a proactive strategy to tackle challenges related to intense industry competition, regulatory setbacks, and technological innovations. The strategy includes investment in R&D to maintain a healthy and demand-oriented pipeline of innovative products, and strategic acquisitions to further its product portfolio and capabilities. It has recently announced an agreement to acquire Silk Road Medical, Inc (SILK), which commercialized a platform of products to prevent stroke in patients having carotid artery disease.
Morgan Stanley upped its price target on shares of Boston Scientific Corporation (NYSE:BSX) from $79.00 to $92.00. The brokerage gave an “Overweight” rating on 15th July. As per Insider Monkey’s 1Q 2024 data, 72 hedge funds reported holding stakes in Boston Scientific Corporation (NYSE:BSX).
Baron Funds, an investment management company, released a second-quarter 2024 investor letter. Here is what the fund said about Boston Scientific Corporation (NYSE:BSX):
“Boston Scientific Corporation (NYSE:BSX) is a global manufacturer of medical devices used in a broad range of interventional medical specialties. Shares increased during the quarter. We believe Boston Scientific can grow sustainably in the high single digits, driven by differentiated products in electrophysiology and structural heart devices. In particular, there has been increasing excitement around the emerging field of PFA, where the company is well positioned. Traditionally, physicians have used temperature-based methods to disable heart tissue responsible for irregular heartbeats. Temperature-based methods may damage surrounding tissue, while PFA relies on electricity to damage aberrant tissue, and because different types of tissue have different electrical thresholds, the surrounding tissue can be selectively spared. Coupled with cost discipline and more than 50 basis points of annual operating margin expansion, we believe Boston Scientific’s double-digit EPS growth profile makes it a compelling name within the medical device universe.”
