Boston Scientific stock (NYSE: BSX) is up 6% in a month, marginally outperforming the broader S&P500 index, up 4%. The company reported its Q3 results in late October. Its top line was in line, but earnings were slightly below our estimates. Boston Scientific’s revenue of $3.2 billion reflected an 8% y-o-y rise, with growth seen in both segments. While the Cardiovascular segment saw a 9.1% rise in sales, MedSurg sales were up 6.5%. The adjusted EPS came in at $0.43 vs. $0.41 in the prior-year quarter, reflecting a 5% rise due to revenue growth, partly offset by a 190 bps fall in operating margin due to higher costs. This compares with our adjusted EPS estimate of $0.45.
Given the forex headwinds, the company lowered its full-year sales forecast to be up 6.5% vs. its prior guidance of 6.5% to 7.5% growth, and its earnings outlook to be in the range of $1.71 to $1.74 vs. its previous guidance of $1.74 to $1.77 on a per-share and adjusted basis.
Boston Scientific’s revenue growth over the recent past has been driven by higher sales for its peripheral interventions, endoscopy, and women’s health products. Its Left Atrial Appendage Closure (LAAC) device – Watchman – has gained market share, driven by a higher physician utilization rate. Electrophysiology sales were up a solid 83% y-o-y, led by higher international sales from Farapulse and POLARx. While this trend is expected to continue in the near term, forex headwinds will likely weigh on the overall revenue growth in the near term.
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We have updated our model to reflect the latest quarterly results. We now estimate Boston Scientific’s Valuation to be $49 per share, which is 17% above the current market price of $42 and marginally lower than our prior estimate of $50. This represents a 28x forward P/E based on our earnings forecast of $1.73 for 2022, compared to the last three-year average of 31x, implying that BSX stock has more room for growth.
While BSX stock looks like it has more room for growth, 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 and recent market volatility have 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 1% 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.
|S&P 500 Return||-3%||-21%||67%|
|Trefis Multi-Strategy Portfolio||-5%||-26%||192%|
 Month-to-date and year-to-date as of 11/10/2022
 Cumulative total returns since the end of 2016