Boston Scientific (NYSE: BSX) is scheduled to report its Q1 2021 results on Wednesday, April 27. We expect the company to report revenues and earnings marginally above the consensus estimates. The company should benefit from the rise in elective procedure volume. Boston Scientific acquired Baylis Medical in Q1, and it should bolster the overall revenue growth for the company. Not only do we expect the company to navigate well through Q1, but we also find its stock undervalued currently, as we discuss below. Our interactive dashboard analysis on Boston Scientific’s Earnings Preview has additional details.
(1) Revenues expected to be slightly above the consensus estimates
- Trefis estimates Boston Scientific’s Q1 2022 revenues to be around $3.0 billion, slightly above the $2.9 billion consensus estimate.
- While the sales are likely to have faced headwinds from the spread of the Omicron variant in certain geographies, overall revenue will trend higher with the rise in overall elective procedure volume compared to the prior-year quarter.
- The revenue growth will also be buoyed by its Left Atrial Appendage Closure (LAAC) device – Watchman – which continues to gain market share driven by a higher physician utilization rate.
- Looking back at Q4, the company reported a 15% y-o-y rise in sales to $3.1 billion, led by a healthy 25% growth for its Cardiovascular segment, a 12% growth each for MedSurg, and Rhythm & Neuro sales.
- Our dashboard on Boston Scientific Revenues offers more details on the company’s segments.
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(2) EPS likely to be marginally above the consensus estimates
- Boston Scientific’s Q1 2022 adjusted earnings per share (EPS) is expected to be $0.40 per Trefis analysis, just a cent above the consensus estimate of $0.39.
- Boston Scientific’s adjusted net income of $653 million in Q4 2021 reflected a significant 94% growth from its $337 million figure in the prior-year quarter.
- This can be attributed to a mix of higher revenue and a rise in net margins.
- With the economic recovery and a robust demand outlook, Boston Scientific’s net margins are expected to improve over the next few quarters. For the full-year 2022, we expect the adjusted EPS to be higher at $1.80 compared to $1.63 in 2021.
(3) BSX stock appears to be undervalued
- We estimate Boston Scientific’s Valuation to be $51 per share, which is 16% above the current market price of $44.
- At its current levels of $44, BSX stock is trading at 23x P/EBITDA, which is lower than the average of 28.5x for the last three years. Our dashboard on Boston Scientific’s EBITDA has more details.
- That said, if the company reports upbeat results, with sales and earnings growth and 2022 guidance better than the street estimates, the P/EBITDA multiple will likely be revised upward, resulting in even higher levels for BSX stock.
Furthermore, the Covid-19 crisis 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 Boston Scientific vs. Amphenol.
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|Trefis Multi-Strategy Portfolio||-7%||-14%||239%|
 Month-to-date and year-to-date as of 4/25/2022
 Cumulative total returns since the end of 2016