On Wednesday, Truist Securities updated their analysis on shares of Boston Scientific (NYSE:BSX), raising the price target to $110 from the previous $100 while keeping a Buy rating on the stock. The adjustment reflects the firm’s confidence in the company’s performance and growth prospects.
The medical device giant, currently valued at $133 billion, has demonstrated strong momentum with revenue growth of 15.66% in the latest twelve months. According to InvestingPro data, the company maintains a GREAT financial health score.
Boston Scientific has been noted as one of the few large-cap companies to outperform the S&P this year, with remarkable year-to-date (YTD) gains. The company’s shares have surged 56%, in contrast to the S&P’s 27% rise, contributing significantly to the healthcare sector’s overall performance. Intuitive Surgical (NASDAQ:), another standout, has seen its shares increase by 62%.
The new price target is based on a projected price-to-earnings (P/E) multiple of approximately 34.5 times Truist’s estimated 2026 earnings per share (EPS) of $3.19. This valuation anticipates some expansion in the peer group multiple and suggests that Boston Scientific can sustain a roughly 65% P/E premium over its large-cap diversified peers, which currently stands at about 34.5 times in comparison to 21 times.
InvestingPro analysis indicates the stock is currently trading at a P/E ratio of 74.14, suggesting it may be overvalued relative to its Fair Value. Discover 14+ additional exclusive insights and detailed valuation metrics with InvestingPro.
Truist’s outlook for Boston Scientific is bolstered by several growth catalysts that are expected to drive the company’s value in the long term. These include the anticipated outcomes from the Option trial for the Watchman device, the scaling of the PFA (Pulmonary Fibrosis Association) business, and future organic contributions from acquisitions such as Axonics Modulation Technologies (NASDAQ:) and Silk Road Medical (NASDAQ:).
The analyst firm believes this premium is justified, considering the company’s potential for above-average revenue growth and margin expansion relative to its peers. The company maintains a healthy gross profit margin of 68.74% and operates with a moderate level of debt, according to InvestingPro‘s comprehensive analysis.
In other recent news, Boston Scientific Corporation (NYSE:) has been making strategic moves to strengthen its position in the medical device industry. The company completed the acquisition of Axonics, a move aimed at bolstering 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. Furthermore, the company has approved its 2025 Annual Bonus Plan and adopted two new performance share programs.
Boston Scientific resumed its AVANT GUARD clinical trial, focusing on a new treatment option for patients with persistent atrial fibrillation. The company also plans to acquire Cortex, a private firm with a unique cardiac mapping system, a move positively received by TD Cowen analysts.
The company’s cardiology business 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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