A Snapshot of Boston Scientific’s Business And Outlook

by Trefis Team
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Boston Scientific (NYSE:BSX) generates its revenues from Cardiovascular, Rhythm Management, and MedSurg businesses. The Cardiovascular segment currently accounts for around 40% of the total revenues, while the other two segments account for 30% each. We believe that the MedSurg segment will grow at a faster pace in the coming years, led by both Urology & Pelvic Health, and Endoscopy, which will likely see a ramp up in existing product lines. We have created an interactive dashboard ~ What Are Boston Scientific’s Key Sources of Revenue.  You can adjust the revenue drivers to see the impact on the company’s overall revenues, earnings, and price estimate.

Expect MedSurg Segment Revenue To See Mid-High Single Digit Growth In The Coming Years

Boston Scientific’s MedSurg segment accounts for roughly 30% of the company’s total revenues. The segment revenues, on average, have grown in mid-teens percent over the last three years, primarily led by a strong growth in its Urology & Women’s Health. We forecast the revenues to grow in low double digits in the near term, and in mid-single digits thereafter. This can be attributed to  the introduction of new products, and a ramp up in the existing product line, which includes SpyGlass DS visualization platform, Axios stent, and the Resolution 360 platform. Also, LithoVue, the company’s single-use digital ureteroscope, is seeing strong growth, and we expect this trend to continue in the near term. 

Expect Peripheral Interventions To Drive Cardiovascular Near Term Revenue Growth 

Cardiovascular segment revenues have grown in mid-single digits over the last few years, and we expect this trend to continue in the near term, driven by continued growth for Synergy, and Promus stents. The company is seeing an increased demand for its drug-eluting products in Europe, and it plans to launch similar products, including Eluvia DES, and Ranger DCB in the U.S. over the next couple of years. This should aid the segment growth in the coming years. 

Expect Strong Growth In Neuromodulation 

Looking at the Rhythm Management segment, the revenues have grown in low single digits over the past few years. However, we forecast the growth to be in mid-high single digits in the near term. While we forecast a low single digit growth for Cardiac Rhythm Management, we believe the other two sub-segments, Electrophysiology, and Neuromodulation, will see strong growth.  In fact, Electrophysiology revenues were up in high teens, while Neuromodulation revenues grew in the mid-20s percent in H1 2018. The company is seeing strong demand for WaveWriter in the U.S. as well as Europe, and it expects the trend to continue in the near term. Cardiac Rhythm Management has been facing some pressure due to growing competition from Abbott in the recent past. However, it will likely see low single digit growth in the coming years, partly aided by its newly launched Resonate platform. 

 

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