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Boston Scientific's Global Growth Robust Amid Currency Woe

Zacks Equity Research

On Jul 10, we issued an updated research report on Boston Scientific Corporation BSX. The company’s recent acquisitions have added various products (though many are under development) boasting great potential to its portfolio. The stock carries a Zacks Rank #3 (Hold).

Over the past year, shares of Boston Scientific have outperformed the industry it belongs to. The stock has rallied 22.5% compared with the industry’s 4% rise.

Growth across majority of 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 the global markets. After a long wait following the suspension of the Lotus valve in Europe, we are relieved by the news of the company receiving a regulatory approval in the United States and commencing a controlled launch of the LOTUS Edge Aortic Valve System in Europe.

Boston Scientific Corporation Price

Boston Scientific Corporation Price

Boston Scientific Corporation price | Boston Scientific Corporation Quote

This apart, the company won a nod for the WATCHMAN Left Atrial Appendage Closure (LAAC) Device from the Pharmaceuticals and Medical Devices Agency in Japan and also obtained the CE Mark. Besides, it initiated a limited market release of the next-generation WATCHMAN FLX LAAC Device in Europe.

In first-quarter 2019, business from the emerging markets registered 22% growth, led by a strong uptick in China. The company is currently looking forward to a much better performance in China, banking on the recent approval of SYNERGY in the region.

We are also closely trackingthe company’s buyouts of late, which are NxThera, Claret Medical, VENITI and Augmenix. These takeovers have already started to strongly contribute to the company’s inorganic growth profile.

On the flip side, declining worldwide pacemaker sales over the recent past persisted to weigh heavily on Boston Scientific's CRM results. In the first quarter of 2019, the company witnessed a mid-single-digit deterioration in its pacemaker performance due to certain product gaps between CRT-D pacing and the MRI line. The company currently anticipates a modest pacemaker headwind for the full year. However, pacemaker sales should gradually improve with product launches (including the launch of RESONATE platform) and easier comps.

An unfavorable currency movement and product recall were major dampeners during the reported quarter. Tough competitors in the large medical device market also pose a challenge to Boston Scientific.

Key Picks

Some better-ranked stocks in the broader medical space are Teleflex Inc. TFX, Penumbra PEN and Bruker Corporation BRKR. While Penumbra sports a Zacks Rank #1 (Strong Buy), each of the other two carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Teleflex’s long-term earnings growth rate is expected to be 13.7%.

Penumbra’s long-term earnings growth rate is projected at 21.5%.

Bruker’s long-term earnings growth rate is estimated at 12.6%.

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