Analyst Note| Debbie S. Wang |
Narrow-moat Boston Scientific got off to a fast start in the first quarter, and we plan to slightly raise our fair value estimate after incorporating a quicker resumption of procedure volume, especially in endoscopy, urology, and peripheral interventions, through the rest of this year. We also note that the firm has made significant progress on its recovery of profitability with operating leverage now moving in a positive direction. Boston’s quarterly operating margin of 13% puts it very close to the last prepandemic period in 2019. All of this reassures us that delayed procedures should be coming back, with some geographies moving faster than others depending on vaccination penetration, viral transmission, and the lifting of distancing measures.