Boston Scientific (NYSE:BSX) is scheduled to report its Q4 2021 results on Wednesday, Feb 2. We expect the company to report revenues in-line but earnings marginally below the consensus estimates, as the rise of Covid-19 cases with the spread of Omicron, likely weighed on the overall procedures volume, while the rise of material cost and wages may adversely impact the company’s operating margin growth. While we don’t expect any earnings surprise from Boston Scientific, its stock has some more room for growth, in our view, as we discuss in the sections below. Our interactive dashboard analysis on Boston Scientific’s Earnings Preview has additional details.
(1) Revenues expected to be in-line with the consensus estimates
- Trefis estimates Boston Scientific’s Q4 2021 revenues to be around $3.1 billion, in-line with the consensus estimate.
- While the revenue estimate reflects a y-o-y growth in early teens percentage, the sales are likely to have faced headwinds from the spread of Omicron variant starting December.
- Hospital staffing shortage due to the spread of Omicron is expected to result in fewer procedures performed in Q4 as well as Q1.
- Looking back at Q3, the company reported a 10% y-o-y rise in sales to $2.9 billion, led by a healthy 19% growth for its Cardiovascular segment, an 11% growth for MedSurg, and 8% rise in Rhythm & Neuro sales.
- Our dashboard on Boston Scientific Revenues offers more details on the company’s segments.
- The sales growth over the recent quarters has partly been driven by the company’s Left Atrial Appendage Closure (LAAC) device – Watchman – which continues to gain market share driven by higher physician utilization rate, and this trend is expected to continue in the near term.
(2) EPS likely to be marginally below the consensus estimates
- Boston Scientific’s Q4 2021 adjusted earnings per share (EPS) is expected to be $0.43 per Trefis analysis, just a cent below the consensus estimate of $0.44.
- Boston Scientific’s adjusted net income of $581 million in Q3 2021 reflected a 10% growth from its $531 million figure in the prior-year quarter.
- With inflationary pressure and near-term impact on sales from the Omicron spread may weigh on the company’s operating margin expansion in Q4.
- With the economic recovery and a robust demand outlook, Boston Scientific’s operating margins are expected to improve over the next few quarters. For the full-year 2022, we expect the adjusted EPS to be higher at $1.86 compared to $0.97 in 2020, and an estimated $1.61 in 2021.
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(3) BSX stock appears to have some more room for growth
- We estimate Boston Scientific’s Valuation to be $49 per share, which is 15% above the current market price of $43.
- This represents a forward P/EBITDA of 39x based on Boston Scientific’s EBITDA for the last twelve months.
- That said, if the company reports upbeat results, with sales and earnings growth as well as 2022 guidance better than the street estimates, it is likely that the P/EBITDA multiple will be revised upward, resulting in even higher levels for BSX stock.
While BSX stock is likely to see little movement in the near term, based on our Q4FY21 expectations, there are several peers in its sector that look like a better bet than Boston Scientific. Check out how Boston Scientific Peers fare on metrics that matter. You will find other useful comparisons for companies across industries at Peer Comparisons.
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|S&P 500 Return||-7%||-7%||98%|
|Trefis MS Portfolio Return||-11%||-11%||248%|
 Month-to-date and year-to-date as of 1/31/2022
 Cumulative total returns since the end of 2016