BTIG Reiterates Buy Rating on Boston Scientific (BSX)
BTIG analyst Marie Thibault reiterated a Buy rating and $84.00 price target on Boston Scientific (NYSE: BSX).
The analyst comments "This was another impressive quarter from Boston Scientific. Yet with the stock seemingly priced for perfection, shares traded off on Wednesday morning as a beat was widely anticipated and investors focused on whether the strong growth can be sustained beyond the Farapulse launch. BSX reported Q2 revenue of $4.120B (+14.5% y/y rep., +14.7% y/y org.) and adj. EPS of $0.62 (consensus $4.021B and $0.58), besting its guidance of +10.5-12.5% y/y reported sales growth, +10-12% y/y organic growth, and $0.57-$0.59 adj. EPS. This quarter, BSX demonstrated broad-based strength across nearly all business segments and geographies. The U.S. Electrophysiology business grew +218% y/y during the first full quarter of the Farapulse U.S. launch, outpacing sell-side forecasts by a stunning ~$93M (cons. $178.1M). The Baylis access products were also used in a large portion of U.S. EP procedures, including ~80% of Farapulse and ~85% of Watchman cases. Watchman grew +20.0% y/y org. to $379M, above consensus of $373M. Product segments like Peripheral Intervention, Endoscopy, and Urology/Pelvic Health, while not a focus of discussion, continued to grow HSD to LDD and roughly in line with consensus. Gross margin was 30 bps lower than consensus at 70.4% because of Fx headwinds and POLARx inventory charges, while operating margins of 27.2% were 50 bps better than consensus as a benefit of the sales beat. BSX increased its 2024 revenue growth outlook to +13.5-14.5% y/y rep. and 13-14% y/y org. (prior 11-13% y/y rep, 10-12% y/y org; consensus 12.5% y/y rep.). The full-year adj. EPS outlook was also raised to $2.38-$2.42 (prior $2.29-$2.34, cons. $2.33). The Q3 guide was set above consensus expectations. BSX continues to be a top performer on a fundamental level, breezing past its sales guidance and gaining opex leverage despite GM headwinds. The company has set a high bar for itself with its stellar track record of beats and raises and its premium valuation multiple. We continue to think this premium multiple is deserved and think that BSX can stay ahead of coming competition with novel product launches, label expansions, and new geographies. We maintain our $84 PT based on 30.5x our 12-24 month EPS estimate. Reiterate Buy."
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Shares of Boston Scientific closed at $78.59 yesterday.