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Analysis of Boston Scientific Corporation

Analysis of Boston Scientific Corporation

31 August 2022

Boston Scientific: Strength is in Technology

For the third year investors pay attention to medicine. The pharmaceutical sector is also at the forefront: the world needs not only basic and highly specialized drugs, but also vaccines, personal protective equipment, and developments, and scenarios for treatment and rehabilitation.

Against this background, the medical technology segment company, Boston Scientific, is showing itself in the best way. It is not enough to defeat covid – you need to deal with its consequences. Boston Scientific specializes in high-tech solutions to problems related to the cardiovascular system, develops new approaches to prevent diseases and looks for opportunities to combat cardiac pathologies. They are one of the most frequent consequences of a complex coronavirus.

In addition to cardiovascular surgery, the company is engaged in developments in the field of gastroenterology, neurosurgery, orthopedics, etc.

The company’s capitalization is estimated at $61 billion. At the end of 2021, adjusted EPS was $1.6 per share. This year, according to the consensus forecast, it will be at the level of $1.8 per security, in 2023 – $1.8. Revenue will consistently grow, although not as fast as competitors (Stryker, Danaher).

The financial side of the work based on the results of the second quarter of 2022:

  • revenue +5.5% YoY to $3.24 billion, above expectations;
  • net income of $246 million, or $0.17 per share (higher than in the same period a year earlier);
  • EPS $0.44 (above expectations).

The bet on the segment of developments related to the treatment of cardiovascular diseases in the structure of the rapid aging of the world’s population is justified. The cardiology sector brings the company up to half of its revenue and may gradually increase in size in the future due to an increase in the number of names of drugs and non-invasive treatment methods.

The business is profitable and the P/E multiplier looks like an undervalued market.

The consensus forecast for Boston Scientific shares is $45-47.

On the daily trading chart of Boston Scientific shares, the MACD indicator is falling in a positive area, but retains a buy signal. The Stochastic oscillator falls in the oversold zone and gives a sell signal, although it is able to turn around.

31 August 2022
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