Boston Scientific Earnings: Underlying Strength Across Products Fuels Double-Digit Sales Growth

Boston Scientific BSX posted another quarter of robust results. As the firm is on track to meet our full-year expectations, we’re leaving our $55 fair value estimate unchanged. Boston saw quarterly revenue growth of 11% in constant currency year over year, driven by double-digit growth from virtually all product categories. Though management narrowed its outlook, our 2023 estimates remain bounded by the new parameters. Boston’s atrial fibrillation ablation and spinal cord stimulation pipeline technologies leave us confident that the firm can maintain its narrow economic moat with such innovation support.

Boston remains in a holding pattern on its upcoming Farapulse pulsed field ablation system for atrial fibrillation, with U.S. regulatory approval not expected until later in 2024. However, the firm recently received approval for its Polarx cryoablation system, which expands Boston’s AF ablation portfolio to encompass another major modality. We think Polarx and Farapulse put Boston in a strong position to break out of its minor AF ablation position and challenge the leaders in this field, Johnson & Johnson and Abbott.

Separately, data shared on its Agent drug-coated balloon at a key interventional cardiology conference this week offered impressive results for peripheral in-stent restenosis. Considering the perennial challenges of stenting arteries in the legs and how these stents are prone to reclogging, DCBs offer an appealing solution. Nonetheless, we recognize the potential for disruptive technologies to come along in the peripheral vascular market. Abbott also presented favorable data on its resorbable stent for leg use, and we think this device could become popular if results turn out to be durable.