On Wednesday, Boston Scientific Corporation (NYSE:BSX) experienced a notable increase in its stock price following an updated price target from a prominent financial firm. The target was raised to $80 from the previous $74, while the company's Buy rating was reaffirmed. The adjustment comes after Boston Scientific reported a robust start to 2024, outperforming its guidance for the first quarter.
Boston Scientific announced first-quarter revenue of $3.856 billion, a 13.8% increase year-over-year on a reported basis and 13.1% on an organic basis. This surpassed both the consensus estimate of $3.684 billion and the company's own expected growth range of 7.5-9.5% year-over-year for reported sales. Adjusted earnings per share (EPS) reached $0.56, also exceeding the guidance of $0.50-$0.52 and the consensus of $0.51.
The company's performance was bolstered by double-digit growth across six of its eight business units and all geographic regions. The Electrophysiology unit stood out with a 71.7% year-over-year organic growth, driven largely by a strong U.S. market response to the Farapulse product launch. Another key product, Watchman, saw an 18.8% organic growth to $344 million, slightly below the consensus estimate of $350 million.
Despite a gross margin that fell short of consensus predictions due to high inventory charges, Boston Scientific maintained its gross margin outlook for the year. Operating expenses were well managed, resulting in operating margins that slightly exceeded consensus estimates at 26.2% versus the expected 25.9%.
Encouraged by its strong start to the year, Boston Scientific has revised its full-year 2024 revenue growth forecast to 11-13% on a reported basis and 10-12% organically, up from the previous 8.5-9.5% and 8-9% respectively.
The consensus was at 9.5% for reported revenue growth. The company also raised its adjusted EPS guidance to $2.29-$2.34, up from the prior forecast of $2.23-$2.27 and above the consensus estimate of $2.26. The outlook for the second quarter is also set higher than consensus expectations.
The financial firm's analyst cited these strong results and the increased guidance as reasons for reiterating the Buy rating and raising the price target, applying a higher 30x price-to-earnings (P/E) multiple to the 12-24 month EPS estimate. Following the announcement, Boston Scientific shares saw an intraday increase of approximately 6%.
InvestingPro Insights
As Boston Scientific Corporation (NYSE:BSX) continues to exhibit a strong performance with its recent first-quarter results, insights from InvestingPro provide additional context for investors considering the stock.
According to InvestingPro data, Boston Scientific has a market capitalization of $107.17 billion and a high P/E ratio of 67.45, which adjusts to 64.11 when considering the last twelve months as of Q4 2023. Despite this high earnings multiple, the company is trading at a low PEG ratio of 0.47, suggesting its earnings growth may justify the higher P/E ratio.
InvestingPro Tips highlight that Boston Scientific is expected to see net income growth this year, with analysts predicting profitability. Additionally, the company is trading at a low P/E ratio relative to its near-term earnings growth, indicating potential value for investors.
It is worth noting that the stock has had a strong return over the last three months, with a price total return of 15.14%. Investors seeking more in-depth analysis can find additional InvestingPro Tips for Boston Scientific at https://www.investing.com/pro/BSX, and with the use of coupon code PRONEWS24, they can receive an extra 10% off a yearly or biyearly Pro and Pro+ subscription. There are 16 additional tips available on InvestingPro that can further guide investment decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.