What To Expect From Boston Scientific Stock In Q2?

Boston Scientific (NYSE:BSX) is scheduled to report its Q2 2021 results on Tuesday, July 27. We expect Boston Scientific to report revenues and earnings in-line with the consensus estimates, driven by a rebound in demand for medical devices. While we don’t expect any earnings surprise from Boston Scientific, its stock remains attractive in our view. Trefis’ forecast indicates that Boston Scientific’s valuation is $49 per share, which is 13% higher than the current market price of under $44. Our interactive dashboard analysis on Boston Scientific’s Pre-Earnings has additional details.

(1) Revenues expected to be in-line with the consensus estimates

Trefis estimates Boston Scientific’s Q2 2021 revenues to be around $2.94 Bil, in-line with the consensus estimate. Boston Scientific in Q2 2020 saw a large 24% decline in revenue, due to deferment of elective surgeries given the spread of Covid-19. Now that nearly half of the U.S. population is fully vaccinated, and on the international front, most of the countries have undertaken large-scale vaccination programs, the healthcare institutions now have more resources to address the surgeries that were postponed earlier, and people are also more confident heading out, compared to the lockdowns in Q2 last year, implying a rebound for Boston Scientific’s business. In fact, Boston Scientific’s sales were also up 8% in Q1 this year, led by double-digit growth in MedSurg and Cardiovascular segments. Our dashboard on Boston Scientific Revenues offers more details on the company’s segments.

2) EPS also likely to be in-line with the consensus estimates

Boston Scientific’s Q2 2021 adjusted earnings per share (EPS) is expected to be $0.37 per Trefis analysis, in-line with the consensus estimate. Boston Scientific’s adjusted net income of $524 Mil in Q1 2021 reflected a solid 34% growth from its $391 Mil figure in the prior-year quarter. This can be attributed to higher revenues and over 350 bps rise in net margins, led by lower R&D and amortization expenses. This trend is expected to continue in Q2 as well, bolstering the overall earnings growth. For the full-year, we expect the adjusted EPS to be higher at $1.59 compared to $0.97 in 2020.

(3) Stock price estimate 13% higher than the current market price

Going by our Boston Scientific’s Valuation, with an EPS estimate of around $1.59 and a P/E multiple of around 31x in 2021, this translates into a price of $49, which is 13% above the current market price of under $44. At current levels of around $44, BSX is trading at 28x its expected EPS of $1.59 in 2021, and the 28x figure compares with levels of 29x seen in 2018 and 37x as recently as late 2020, implying there is more room for growth in BSX stock.

Note: P/E Multiples are based on Share Price at the end of the year and reported (or expected) Adjusted Earnings for the full year

While BSX stock looks attractive at its current levels, 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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