Three analysts have raised the EPS estimates of this medical device company in the last 30 days.
Boston Scientific Corporation (BSX)
From Canaccord Genuity Research
Boston Scientific Corporation (BSX) biennial investor day laid out an achievable, if not conservative long-range plan, in our view, with management projecting +6-9% organic top-line growth.
Op Margin expansion of 50-100bps/year (off 2019E OM of 26.0-26.5%) and double-
digit pro forma EPS growth through 2022. Management’s outlook implies—at the mid-
point—an acceleration over the past 3-year LRP, and we think the upper-end of these ranges are possible thanks to a strong product portfolio in faster-growing segments (S-ICD, Watchman, Acurate) including recent strategic tuck-ins (Augmenix, NxThera, Claret, Vertiflex, BTG – pending deal closure) to be enhanced going forward via new product introductions (Lotus, next-gen SCS and DBS platforms, EXALT D) and tangential indication expansion supporting strong, sustainable top-line growth.
Coming out of today’s update, we have even more confidence in our core thesis on BSX, initially stated when we initiated coverage of the firm in late 2017, which we think is as relevant today
as it was 2 years ago. Ultimately, we think the stock will continue to outperform its large-cap med-tech peers over the next few years behind three drivers:
1. BSX will deliver faster organic growth vs. large-cap med-tech peer group, with BSX
expecting to deliver a 6-9% three-year sales CAGR through 2022E.
2. BSX will deliver additional operating margin expansion, +50-100bps/year over the
next three years, portending faster EPS growth vs. BSX’s peer group.
3. BSX will leverage a relatively unencumbered balance sheet to consummate deals
capable of augmenting growth and margins beyond organic means. BSX projects
delivering a 10% three-year CAGR (off $2.2B in 2019E), the majority of which is
expected to be allocated to M&A/returning cash to shareholders.
Jason Mills, Cecilia Furlong, and David Rescott, Canaccord Genuity Research, www.canaccordgenuity.com, July 1, 2019