Will Boston Scientific Stock Rise Post Q3 Results?

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Boston Scientific

Boston Scientific (NYSE: BSX) is scheduled to report its Q3 2022 results on Wednesday, October 26. We expect the company to report revenues and earnings in line with the consensus estimates. A rise in elective surgeries performed and market share gains for some of its products, including Watchman, will likely aid the company’s top-line growth. However, forex headwinds and supply chain disruption may weigh on the overall top and bottom line growth.  Not only do we expect Boston Scientific to navigate well in Q3, our forecast indicates that BSX stock has ample room for growth, as discussed below. Our interactive dashboard analysis of the Boston Scientific Earnings Preview has additional details.

(1) Revenues expected to align with the consensus estimates

  • Trefis estimates Boston Scientific’s Q3 2022 revenues to be around $3.2 billion, marginally above the $3.1 billion consensus estimate.
  • The company should benefit from a continued uptick in elective procedures and from its recent acquisitions, including Baylis.
  • Looking back at Q2, the company reported a 5% y-o-y rise in sales to $3.2 billion, led by mid-single-digit gains across segments.
  • Our dashboard on Boston Scientific Revenues offers more details on the company’s segments.
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(2) EPS is likely to be in line with the consensus estimates

  • Boston Scientific’s Q3 2022 adjusted earnings per share (EPS) is expected to be $0.45 per Trefis analysis, aligning with the consensus estimate of $0.44.
  • Boston Scientific’s adjusted net income of $635 million in Q2 2021 reflected a 10% growth from its $577 million figure in the prior-year quarter.
  • This can be attributed to higher revenue and an 80 bps rise in net margins.
  • For the full-year 2022, we expect the adjusted EPS to be higher at $1.78, compared to $1.63 in 2021.

(3) BSX stock appears to have more room for growth

  • We estimate Boston Scientific’s Valuation to be $50 per share, which is 22% above the current market price of $41.
  • At its current levels, BSX stock is trading at 23x forward P/E based on our earnings forecast of $1.78 for 2022, compared to the last three-year average of 31x, implying that BSX stock has ample room for growth.
  • If the company reports upbeat Q3 results and provides an outlook better than the street estimates, the P/E multiple will likely be revised upward, resulting in higher levels for BSX stock.
While BSX stock looks undervalued, it is helpful to see how Boston Scientific’s Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.

Furthermore, the Covid-19 crisis has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised at how counter-intuitive the stock valuation is for Xylem vs. Merck.

With inflation rising and the Fed raising interest rates, among other factors, BSX stock has fallen 5% this year. Can it drop more? See how low Boston Scientific stock can go by comparing its decline in previous market crashes. Here is a performance summary of all stocks in previous market crashes.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

 Returns Oct 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 BSX Return 5% -4% 88%
 S&P 500 Return 5% -21% 68%
 Trefis Multi-Strategy Portfolio 1% -25% 196%

[1] Month-to-date and year-to-date as of 10/23/2022
[2] Cumulative total returns since the end of 2016

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