On Thursday, TD Cowen demonstrated confidence in shares of Boston Scientific Corporation (NYSE:BSX), raising its price target on the stock to $110 from $100, while reiterating a Buy rating. Currently trading near its 52-week high of $91.93 and boasting a market capitalization of $134.47 billion, the stock has delivered an impressive 56.65% return year-to-date.
The firm's analysis suggests that Boston Scientific is on track to become the leading large-cap medical technology company in the period from 2024 to 2026, potentially extending beyond.
According to the firm, Boston Scientific's growth can be attributed to the robust performance of its commercial portfolio, which includes products like Farapulse and Watchman, as well as the anticipated impact of new, differentiated products emerging from its pipeline. With revenue growth of 15.66% in the last twelve months, the company's performance validates these observations.
The firm acknowledges that Boston Scientific's growth has been peer-leading and believes that this will continue to attract investor interest, making it their top pick for 2025. InvestingPro analysis reveals 16 additional key insights about BSX's growth prospects and market position.
The firm further notes that Boston Scientific stands out in the medical devices sector due to its attractive growth story. The company is expected to maintain double-digit organic revenue growth, despite facing a challenging comparison against strong growth in the previous two years.
With a robust gross profit margin of 68.74%, Products such as Farapulse and Watchman are seen as significant contributors to the company's growth, with the potential to add 400 to 500 basis points to organic revenue growth collectively.
The analyst also points out that these products should contribute to a positive gross margin mix shift once they are fully scaled. Boston Scientific's operating margin expansion is considered one of the best in the industry.
The firm concludes that these factors, combined with what is perceived as the strongest earnings per share (EPS) growth trajectory among large-cap medical devices companies, justify the expectation that Boston Scientific will continue to be valued at premium multiples, currently trading at a P/E ratio of 74.89.
According to InvestingPro's Fair Value analysis, the stock appears to be trading above its intrinsic value, suggesting investors should carefully consider their entry points. For a comprehensive analysis including detailed valuation metrics and growth projections, explore the full Pro Research Report available on InvestingPro.
In other recent news, Boston Scientific Corporation has been making strategic moves in the medical device industry. The company has completed the acquisition of Axonics, aimed at strengthening its Urology and Pelvic Health business. This acquisition is expected to have a neutral impact on Boston Scientific's earnings per share (EPS) for 2024 and 2025, with revenue estimates revised upward for these years.
Boston Scientific has also announced a definitive agreement to acquire Intera Oncology Inc., a specialist in liver cancer treatment devices and medication, expected to conclude in the first half of 2025. The company has approved its 2025 Annual Bonus Plan and adopted two new performance share programs.
The company has resumed its AVANT GUARD clinical trial, focusing on a new treatment option for patients with persistent atrial fibrillation. Boston Scientific also plans to acquire Cortex, a private firm with a unique cardiac mapping system, a move positively received by analysts at TD Cowen.
Boston Scientific's cardiology business has reported robust growth rates, with a 27% increase in the U.S. and 18% internationally. The company is also investing in mitral and tricuspid therapies, aiming to double the global drug-coated balloon business by 2025. These are recent developments that reflect Boston Scientific's commitment to innovation and growth.
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