BSX Pre-Q4 Earnings: To Buy or Not to Buy Boston Scientific Stock Now?

Boston Scientific BSX is slated to report fourth-quarter fiscal 2024 results on Feb. 5 before market open.See the Zacks Earnings Calendar to stay ahead of market-making news.For fourth-quarter fiscal 2024, Boston Scientific projects adjusted earnings in the range of 64-66 cents per share. Revenue growth is projected in the range of approximately 16.5-18.5% on a reported basis (up 14-16% organically).The Zacks Consensus Estimate for earnings has been steady at 65 cents per share over the past 90 days, indicating 18.2% growth from the figure reported in the year-ago quarter.Image Source: Zacks Investment ResearchBSX’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average earnings surprise being 8.29%.What Our Model Unveils for BSXPer our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, has a higher chance of beating estimates, which is not the case here.Earnings ESP: Boston Scientific has an Earnings ESP of -0.60%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.Zacks Rank: The company currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks Rank #1 stocks here.Factors to Note Prior to Boston Scientific's Q4 EarningsFrom the beginning of 2024, U.S. hospitals experienced a continued increase in hospital admissions across many facilities. This significantly increased demand for Boston Scientific’s products during this period. With this uptrend seeming to have continued through the fourth quarter of 2024 as well, BSX, with its innovative pipeline, expansion into faster growth markets, globalization efforts and enhanced digital capabilities, looks well-positioned to report decent sales results for this period, too.However, profitability is expected to have remained sluggish amid a challenging supply environment in limited geographies. Further, the business is expected to have faced the hurdle of surging labor and raw material costs, as well as healthcare staffing shortages, which might have weighed on the bottom line in the fourth quarter.On a geographic basis, despite all macroeconomic headwinds, the company registered strong growth in every geographic region in the last reported quarter, with core business units gaining or maintaining market share. EMEA is expected to report strong growth within EP (banking on the company’s Pulsed Field Ablation [PFA] leadership, complex percutaneous coronary intervention [PCI] and structural heart). However, with the global supply chain issue still prominent, the international business of BSX is once again expected to have been partially hurt in the fourth quarter.The company is expected to have registered strong growth in the Asia Pacific, which is led by strength in China and Japan. Growth in Japan is expected to have been fueled by new products, most notably the FARAPULSE PFA system. Performance in China is expected to have been led by the company’s advanced portfolio, with particular strength in its interventional cardiology therapies, WATCHMAN, cardiac rhythm management (CRM) and Peripheral Intervention (PI) business units. The recent approvals for FARAPULSE and AGENT DCB in China are likely to have contributed to the top line in the to-be-reported quarter.However, China VBP complications with coronary imaging and Japan reimbursement cuts in June might have partially dented growth in the fourth quarter.In EMEA, the company is expected to have registered growth within structural heart, including Transcatheter aortic valve replacement, WATCHMAN and other interventional cardiology therapies, as well as endoscopy, urology and electrophysiology divisions, fueled by ongoing investments in emerging markets, new and ongoing product launches across the portfolio, pricing discipline and strong commercial execution. The company is expected to have witnessed strength in ACURATE Neo2 and FARAPULSE.The WATCHMAN subsegment within the Cardiovascular division has shown meaningful strength in recent times. It is once again expected to report strong growth in the to-be-reported quarter on sustained momentum from second-generation WATCHMAN FLX, ongoing clinical evidence, globalization and commercial execution. With the continued conversion to WATCHMAN FLX Pro in the United States and Japan, this momentum is expected to have continued within the WATCHMAN franchise in the fourth quarter.The consensus estimate for WATCHMAN revenues is pegged at $406 million for the fourth quarter, indicating a 17.6% improvement from the year-ago period.The Interventional Cardiology business is expected to have registered year-over-year growth, banking on the strong performance of the company’s global imaging franchise and calcium portfolio. Further, the limited launch of AGENT DCB in the United States, which received positive initial physician feedback, might have boosted growth. However, this might have been offset by the ongoing price pressure on drug-eluting stents.The consensus estimate for Interventional Cardiology revenues of $672 million projects a 9.4% improvement in the fourth quarter.Within the Peripheral Interventions business, fourth-quarter sales are expected to have been driven by the strong performance of the drug-eluting franchise, supported by ongoing clinical evidence and the company’s category leadership portfolio. Specifically, Arterial franchise revenues are expected to have been strong. Within Venous, the company might have once again witnessed strong sales from Varithena and Clot Management.Peripheral Intervention revenues are estimated to be $628 million, implying an improvement of 17.8% in the fourth quarter.Interventional Oncology is expected to have gained from strong momentum in the company’s advanced broad offering across cancer therapies, TheraSphere and ICEfx, as well as the robust set of embolization access and delivery tools.Within Urology/ Pelvic Health, Stone Management, Prostate Health and Pelvic Health franchises are expected to have recorded strong growth, banking on strong performances of LithoVue, SpaceOAR and Rezum in key countries.Within Endoscopy, the company is expected to report strong momentum in AXIOS and Exalt D. BSX earlier expected Endoscopy sales to perform better than the market throughout 2024, enabled by the innovative portfolio.Within Neuromodulation, the company is likely to have registered balanced growth across the Vercise Genus portfolio and the innovative Image Guided Programming, which is designed to improve the precision and efficiency of the deep brain stimulation procedure.BSX's Strong Price PerformanceDriven by balanced segmental performance and continued market expansion, the BSX stock has had a dream run on the bourses, gaining a strong 66.9% in the past year. Shares of BSX have outperformed its industry, the Medical sector and the benchmark in a year’s time as well as well as fellow industry players like Abbott ABT and Medtronic MDT.One-Year Price ComparisonImage Source: Zacks Investment ResearchExpensive ValuationBSX stock is not so cheap as its Value Score of D suggests a stretched valuation at this moment.In terms of the forward 12-month Price/Earnings ratio, Boston Scientific’s shares are trading at 36.54, higher than the broader industry’s 22.93.Among the company’s peers, while MDT currently trades at a forward 12-month P/E of 15.98X, ABT trades at 24.55X.Image Source: Zacks Investment ResearchWall Street Average Target Price for BSX Suggests Little UpsideBased on short-term price targets offered by 27 analysts, the Wall Street average price target is $103.74 per share, suggesting a mere 1.4% upside from current levels.Image Source: Zacks Investment ResearchBSX Stock Worth Holding NowDespite macroeconomic concerns, currency headwinds and related cost inflation, Boston Scientific is seeing strength across target markets. Strong worldwide demand for its core businesses is impressive. We expect the company to significantly reduce the cost of manufacturing products and improve the margin scenario going forward, benefiting from the easing monetary policy. Given BSX’s impressive rally, the stock has all the potential to be in investors’ kitty now.However, BSX stock currently holds very little upside potential. Its stretched valuation, too, suggests that investors may be paying a higher price relative to the company's expected earnings growth. While current shareholders should hold their positions, new investors should wait for the stock to retract some of its recent gains, providing a better entry point.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.3% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Abbott Laboratories (ABT): Free Stock Analysis Report Boston Scientific Corporation (BSX): Free Stock Analysis Report Medtronic PLC (MDT): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks