Company Reports

Boston Scientific saw a fast start to 2024 thanks to the much-anticipated launch of its new pulsed field ablation, or PFA, platform for atrial fibrillation, or AF. With both Farapulse PFA and the Watchman franchise performing so strongly, we’ve raised our fair value estimate to $70 per share, up from $61, to reflect our more optimistic expectations for cardiology in the 2024-26 time frame. First-quarter revenue grew 15% in constant currency, fueled by strength in cardiology and peripheral interventions. With key products growing faster than the medical device market and the impending acquisition of Axonics, Boston is well positioned to accelerate growth through the midterm and reinforce the intangible assets supporting its narrow economic moat.

Boston Scientific has solidified its footing as one of three major cardiac device makers and significantly improved its innovation and operational chops. Boston remains a tough competitor—even a prolonged period of operational and management upheaval from 2006 to 2014 wasn't enough to permanently impair the underlying business and Boston's ability to develop and commercialize new technology platforms. Under CEO Michael Mahoney, the firm has focused on introducing meaningful innovation and leveraging its historically formidable sales and marketing resources.

Boston Scientific has solidified its footing as one of three major cardiac device makers and significantly improved its innovation and operational chops. Boston remains a tough competitor—even a prolonged period of operational and management upheaval from 2006 to 2014 wasn't enough to permanently impair the underlying business and Boston's ability to develop and commercialize new technology platforms. Under CEO Michael Mahoney, the firm has focused on introducing meaningful innovation and leveraging its historically formidable sales and marketing resources.

Narrow-moat Boston Scientific posted impressive fourth-quarter results that continued the strength seen in earlier quarters and generally met our expectations. As a result, we're holding steady on our fair value estimate. Quarterly operational revenue growth of 13% exceeded our estimates slightly, while better-than-expected gross margin in 2023 was offset by higher-than-expected spending on sales and marketing. Nevertheless, Boston remains in a strong position to grow faster than the medtech market again in 2024 thanks to U.S. rollout of Farapulse (pulsed field ablation, or PFA) for atrial fibrillation and continued adoption of Watchman FLX.

Boston Scientific 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.

Narrow-moat Boston Scientific's long-awaited clinical data on its Farapulse pulsed field ablation, or PFA, device for atrial fibrillation didn't disappoint, and we've raised our fair value estimate to $55 per share to reflect both our estimates for higher electrophysiology growth, as well as cash flows realized since our last update.

Boston Scientific has solidified its footing as one of three major cardiac device makers and significantly improved its innovation and operational chops. Boston remains a tough competitor—even a prolonged period of operational and management upheaval from 2006 to 2014 wasn't enough to permanently impair the underlying business and Boston's ability to develop and commercialize new technology platforms. Under CEO Michael Mahoney, the firm has focused on introducing meaningful innovation and leveraging its historically formidable sales and marketing resources.

Narrow-moat Boston Scientific’s second-quarter results demonstrated similar strength as the double-digit growth seen in the previous quarter, and we plan to modestly raise our fair value estimate on slightly higher 2023 and 2024 projections. Boston delivered top-line growth in the double digits again, with quarterly operational revenue growth of 12% fueled by endoscopy, cardiology, and peripheral intervention. Boston kept a tight rein on expenses in the second quarter, with manufacturing and R&D expense falling slightly short of our expectations, but this was offset by slightly higher-than-expected SG&A.

Boston Scientific posted stellar first-quarter results that exceeded our expectations. However, we're mindful that this strength is likely to moderate through the rest of the year, and mild upward adjustments to our projections may only result in a modest bump to our fair value estimate of $45 once we also factor in the conversion of preferred stock scheduled for the second quarter. Nonetheless, the firm's pipeline and new products reinforce our confidence in Boston's narrow economic moat.

Boston Scientific has solidified its footing as one of three major cardiac device makers and significantly improved its innovation and operational chops. We think the firm's ability to emerge strongly from nearly a decade of acquisition and management upheaval underscores just how tough a competitor Boston is as well as how difficult it is for any new competitors to establish a foothold in these highly consolidated device markets. Under CEO Michael Mahoney, the firm has focused on introducing meaningful innovation and leveraging its historically formidable sales and marketing resources.

Narrow-moat Boston Scientific reported solid full-year top-line results that were consistent with our expectations, but reported earnings fell well short of our projections thanks to an unanticipated reserve to accommodate any efforts by the Italian government to claw back some of its healthcare spending. However, after adjusting for this event, full-year earnings per share nearly hit our estimate on the nose. At this point, we’re leaving our fair value estimate intact, as we saw little in the quarter to change our longer-term projections for Boston, and our 2023 estimates remain bound by management’s outlook.

Boston Scientific delivered robust revenue growth in the third quarter but fell short of FactSet consensus expectations on the bottom line thanks to continued pressure on materials and freight costs. Nonetheless, the firm remains on track to meet our full-year expectations, and we’re holding steady on our $45 fair value estimate. We’re pleased to see Boston make progress with the development of its pipeline and commercialization of key products, including Watchman for left atrial appendage closure and Farapulse for safer atrial fibrillation ablation—progress that reinforces Boston’s narrow economic moat, in our view.

Boston Scientific posted second-quarter results that exceeded consensus expectations (based on FactSet), but the firm remains on track to meet our full-year projections and we’re holding firm on our fair value estimate. Boston racked up 10% quarterly revenue growth on an operational basis, of which 300 basis points reflects acquisitions. Nonetheless, the 7% organic revenue growth year over year was still impressive in a medical technology field that has seen the market growing closer to 5%. We are confident in Boston’s narrow moat, based primarily on intangible assets. Importantly, the firm has demonstrated a solid track record for innovation, which when coupled with Boston’s formidable commercial organization, can deliver outsize results.

Boston Scientific saw strong first-quarter results that generally fell in line with our expectations, and we’re standing pat on our fair value estimate. Like other medical device makers, Boston felt the pinch of omicron depressing procedure volume in January, followed by increasing improvement as the quarter unfolded, which translated into quarterly organic revenue growth of 10% versus the prior-year period. Similarly, Boston has been under pressure from rising transportation and component costs, which we expect should damp margin expansion this year. However, underlying demand remains strong, and some delayed procedures should return in 2022, though hospital staffing remains a constraint on growth in procedure volume through the near term. Importantly, we remain confident in Boston’s narrow moat, which is supported by intangible assets and its product pipeline.

Boston Scientific has solidified its footing as one of three major cardiac device makers and significantly improved its innovation and operational chops. We think the firm's ability to emerge strongly from nearly a decade of acquisition and management upheaval underscores just how tough a competitor Boston is as well as how difficult it is for any new competitors to establish a foothold in these highly consolidated device markets. Under CEO Michael Mahoney, the firm has focused on introducing meaningful innovation and leveraging its historically formidable sales and marketing resources.

Narrow-moat Boston Scientific posted strong fourth-quarter results that met our expectations on an overall basis, and we’re leaving our fair value estimate unchanged. While fourth-quarter revenue grew 15% organically over the prior-year period, we were pleased to see respectable growth across most product categories compared with the prepandemic fourth quarter of 2019. For the full year, endoscopy and urology and pelvic health fell modestly short of our projections, but this dynamic was more than offset by stronger-than-expected performance from the medsurg segment, peripheral interventions, and especially interventional cardiology. The firm also managed to push operating leverage in a positive direction, with cost of goods sold and SG&A as a percentage of sales falling 380 and 150 basis points, respectively, year over year.

Boston Scientific posted solid third-quarter results that leave the firm on track to meet our full-year projections on the top and bottom lines; we’re holding steady on our $45 fair value estimate. Though we had been concerned that the rise of the delta variant would dampen nonpandemic procedure growth during the quarter, the effect was relatively mild, in our view, and more than offset by the strength of new product launches. While the pandemic remains a key factor influencing near-term performance for medical device firms, we see little in the way of fundamental changes to demand or Boston’s ability to innovate. We remain confident in the firm’s narrow economic moat and its intangible assets.

Boston Scientific posted an impressive rebound in the second quarter compared with the muted prior-year period, and we’re leaving our fair value estimate unchanged, as our assumption for a rise in the U.S. corporate tax rate largely offset cash flows realized. Perhaps we were even more impressed with Boston’s gains against the more normal performance seen in second-quarter 2019. In particular, endoscopy, urology, interventional cardiology, and neuromodulation all delivered strong, organic double-digit gains over the same quarter in 2019. While we think this rebound is partly reflective of the resumption of non-pandemic procedures, we also think it is driven by Boston’s new product portfolio that has allowed it a leg up on competition. This underscores the strength of Boston’s narrow economic moat, in our minds.

Boston Scientific has solidified its footing as one of three major cardiac device makers and significantly improved its innovation and operational chops. We think the firm's ability to emerge strongly from nearly a decade of acquisition and management upheaval underscores just how tough a competitor Boston is as well as how difficult it is for any new competitors to establish a foothold in these highly consolidated device markets. Under CEO Michael Mahoney, the firm has focused on introducing meaningful innovation and leveraging its historically formidable sales and marketing resources.

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.