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Boston Scientific Gets a Boost From New Products, Buyouts

Zacks Equity Research

On Jan 16, we issued an updated research report on Boston Scientific Corporation BSX. The company’s recent acquisitions added various products (though many are under development) with immense potential to its portfolio. The stock carries a Zacks Rank #3 (Hold).

Over the past six months, shares of Boston Scientific have outperformed the industry it belongs to. The stock has gained 10.8% compared with 9.6% growth of its industry.

Growth across all its business lines and geographies was promising. The company is leaving no stone unturned to strengthen its core businesses and invest in new technologies as well as global markets.

Within structural heart, the launch of LOTUS Edge Aortic Valve System in the United States and Europe has been encouraging with positive customer feedback pouring in. Per Boston Scientific, the combined strength of WATCHMAN, ACURATE, LOTUS Edge and SENTINEL positioned the company well to reach the upper end of its structural heart revenue guidance of $700-725 million for 2019.

Boston Scientific Corporation Price

Boston Scientific Corporation Price
Boston Scientific Corporation Price

Boston Scientific Corporation price | Boston Scientific Corporation Quote

Within MedSurg, Endoscopy business delivered strong organic growth on the back of multiple unveilings across several franchises including infection prevention, therapeutic imaging plus biliary and luminal hemostasis product lines. The company is currently on track for the year-end launch of Exalt-D Single-Use Duodenoscope, which is used in ERCP procedures.

According to Boston Scientific, the therapeutic imaging portfolio represents a significant opportunity in 2020 and beyond with an incremental $2-billion market opportunity by 2024. Within Urology and Pelvic Health, the company witnessed a double-digit uptick in organic sales, led by a strong momentum in LithoVue, lithotripsy and laser portfolio.

Moreover, as a major development, the company’s recently-introduced SpaceOAR Hydrogel in the United Kingdom contributed 900 basis points of operational revenue growth in the third quarter. SpaceOAR expects to generate $100 million in sales during 2019.

We are also looking forward to the company’s recent buyouts of BTG, NxThera, Claret Medical, VENITI and Augmenix. Good news is that these already started to highly accretive to the company’s inorganic growth profile.

However, Boston Scientific is suffering significant cost escalation and waning worldwide pacemaker sales, which are also hurting the CRM business. Unfavorable currency movement and tough competitors in the large medical device market also pose a tough challenge to Boston Scientific.

Key Picks

Some better-ranked stocks from the broader medical space are Haemonetics Corporation HAE, Hill-Rom Holdings, Inc. HRC and Medtronic plc MDT.

Haemonetics has a Zacks Rank #1 (Strong Buy) and a projected long-term earnings growth rate of 13.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Hill-Rom’s long-term earnings growth rate is estimated at 11.7%. The company presently carries a Zacks Rank #2 (Buy).

Medtronic’s long-term earnings growth rate is projected at 7.4%. The stock currently holds a Zacks Rank of 2.

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Hill-Rom Holdings, Inc. (HRC) : Free Stock Analysis Report
 
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