Here's Why You Should Buy Boston Scientific (BSX) Stock Now
Boston Scientific Corporation BSX has been gaining investor confidence on consistently encouraging results. The company’s value-added acquisition is an added plus. Further, the company’s long-term goals look impressive as well. However, stiff competition and foreign exchange fluctuations remain concerns.
This developer, manufacturer, and marketer of medical devices for use in interventional medical specialties has a market cap of $61.4 billion. The company has an earnings growth rate of 9.3% for the next five years.
With solid prospects, this Zacks Rank #2 (Buy) stock is an attractive pick for investors at the moment. Over the past six months, the company’s share price has outperformed its industry. The stock has gained 15.6% compared with the industry’s 4.7% rally. Also, the company has outperformed the S&P 500’s 19.2% rise.
Let’s delve deeper.
Solid Quarterly Performance: Boston Scientific ended the first quarter of 2021 on a bullish note with adjusted earnings and revenues surpassing the Zacks Consensus Estimate as well as the company’s expectations by a wide margin. Barring Latin America and Canada, organic revenues at each of its core business segments and geographies rose in the reported quarter. The company also registered strong sequential improvement in overall financial performance. Further, the company has raised its full-year guidance, calling for year-over-year growth in revenues and earnings.
Impressive Value-Adding Acquisitions: We are impressed with Boston Scientific’s recent acquisitions that have added numerous products (though many are under development) with immense potential. This, in turn, should help boost the top line in the long term. The company is optimistic about its current deal to acquire Preventice Solutions, which offers new-generation detection algorithms, a broad portfolio with BodyGuardian MINI and establishes a strong position for Boston Scientific in the field of cardiac diagnostics. The deal, which is expected to complete by mid-2021, is going to strengthen the company’s position across all diagnostic therapies, including AECG and LUX-Dx, implantable cardiac monitor, and HeartLogic, as well as implantable and ablative therapies.
Long-Term Growth Goals Look Impressive: We are upbeat about Boston Scientific’s long-term growth strategy and offered plans for product pipeline provided in 2019. According to the company, this is aimed at improving its clinical and economic outcomes, sustaining category leadership in served markets and expanding into high-growth, adjacent markets.
In this regard, Boston Scientific noted that in 2018, it invested approximately $1 billion in R&D and also announced 10 strategic acquisitions in support of its category leadership scheme. Based on these investments, the company expects to introduce approximately 75 products by 2022. According to the company, by 2022, these product launches will help 80% of its sales to reach high and moderate -growth markets.
Estimate Trend
Boston Scientific has been witnessing a positive estimate revision trend for 2021. Over the past 60 days, the Zacks Consensus Estimate for its earnings has moved 6.1% north to $1.57.
The Zacks Consensus Estimate for the company’s second-quarter fiscal 2021 revenues is pegged at $2.94 billion, suggesting 46.9% growth from the year-ago reported number.
Other Key Picks
A few other top-ranked stocks from the broader medical space are National Vision Holdings, Inc. EYE, Owens & Minor, Inc. OMI and Envista Holdings Corporation NVST. While National Vision and Owens & Minor sport a Zacks Rank #1 (Strong Buy), Envista Holdings carries a Zacks Rank #2. You can see the complete list of Zacks #1 Rank stocks here.
National Vision has a projected long-term earnings growth rate of 12%.
Owens & Minor has a projected long-term earnings growth rate of 15%.
Envista Holdings has an estimated long-term earnings growth rate of 26%.
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