Will Boston Scientific Stock Rise After A 5% Fall In A Week?

The stock price of Boston Scientific (NYSE:BSX) reached its 52-week high of $44 in April this year before a recent sell-off in broader markets, which led to a 7% drop in BSX stock to levels of around $41 currently. The recent sell-off in the broader markets can be attributed to rising Covid-19 cases due to the new Delta variant, which may result in slower economic growth, compared to what was earlier anticipated. However, BSX stock, in particular, is being weighed down due to concerns of increasing competition for the company’s Left Atrial Appendage Closure (LAAC) device – Watchman. Boston Scientific’s peer, Abbott’s Amulet (LAAC device), is expected to receive the U.S. FDA approval later this year, and if approved, it will gain some of the market share from Watchman, which alone is expected to garner $1 billion in annual sales over the coming years. It is not just Abbott, even Johnson & Johnson is working on a LAAC device – WaveCrest – which may hit the market in 2023. ^[1] These concerns, along with a downgrade from one of the Wall Street analysts, have weighed on BSX stock over the last week or so.

Now, after a 5% fall in a week, will BSX stock continue its downward trajectory over the coming weeks, or is a recovery in the stock imminent? According to the Trefis Machine Learning Engine, which identifies trends in the company’s stock price using ten years of historical data, returns for BSX stock average 3.2% in the next one-month (twenty-one trading days) period after experiencing a 5% drop over the previous week (five trading days).

But how would these numbers change if you are interested in holding BSX stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning Engine to test Boston Scientific stock chances of a rise after a fall. You can test the chance of recovery over different time intervals of a quarter, month, or even just 1 day!

MACHINE LEARNING ENGINE – try it yourself:

IF BSX stock moved by -5% over five trading days, THEN over the next twenty-one trading days BSX stock moves an average of 3.2%, with a 63% probability of a positive return over this period.

Some Fun Scenarios, FAQs & Making Sense of Boston Scientific Stock Movements:

Question 1: Is the average return for Boston Scientific stock higher after a drop?

Answer: Consider two situations,

Case 1: Boston Scientific stock drops by -5% or more in a week

Case 2: Boston Scientific stock rises by 5% or more in a week

Is the average return for Boston Scientific stock higher over the subsequent month after Case 1 or Case 2?

BSX stock fares better after Case 1, with an average return of 3.2% over the next month (21 trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an average return of 1.4% for Case 2.

In comparison, the S&P 500 has an average return of 3.1% over the next 21 trading days under Case 1, and an average return of just 0.5% for Case 2 as detailed in our dashboard that details the average return for the S&P 500 after a fall or rise.

Try the Trefis machine learning engine above to see for yourself how Boston Scientific stock is likely to behave after any specific gain or loss over a period.

Question 2: Does patience pay?

Answer: If you buy and hold Boston Scientific stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.

Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!

For BSX stock, the returns over the next N days after a -5% change over the last 5 trading days is detailed in the table below, along with the returns for the S&P500:

You can try the engine to see what this table looks like for Boston Scientific after a larger loss over the last week, month, or quarter.

Question 3: What about the average return after a rise if you wait for a while?

Answer: The average return after a rise is understandably lower than after a fall as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks.

It’s pretty powerful to test the trend for yourself for Boston Scientific stock by changing the inputs in the charts above.

While BSX stock may gain in the near term, 2020 has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is for Mettler vs Abbott.

See all Trefis Price Estimates and Download Trefis Data here

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1. Boston Scientific’s Watchman Faces Imminent Domestic Competition, Amanda Pedersen, MDDI, Jul 13, 2021 [↩]