Boston Scientific's first-quarter sales guidance is "impressive," an analyst said Wednesday as BSX stock hit a record high.
For the current quarter, the medical technology company expects sales to increase 7% to 9% on an organic basis. The high end of the guidance is impressive "considering it is the toughest comparison (quarter)," Evercore ISI analyst Vijay Kumar said in a report. Kumar expected just 7% organic sales growth in the first quarter.
The company also beat fourth-quarter expectations, driven by strong sales in its cardiac and medical-surgical divisions.
Kumar credited 43% growth in electrophysiology — a type of test that examines the heart's electrical activity — and 23% growth from Watchman. Watchman is an implantable device that permanently closes an appendage in the heart to lower the risk of strokes.
"All in, the magnitude of the beat was consistent with peer Stryker and the guide seems to have some cushion," Kumar said.
On the stock market today, BSX stock jumped 3% to 63.26. Boston Scientific stock broke out of a flat base with a buy point at 55.38 in November, according to MarketSmith.com. Now, shares are trading above the buy zone, which runs up to 58.15.
Shares of Stryker, which also reported strong earnings late Tuesday, surged 6% to 335.48.
BSX Stock: Double-Digit Growth
Across all products, Boston Scientific's sales increased nearly 15% on a strict as-reported basis to $3.73 billion. Organically, sales climbed 13.6%. Adjusted profit rose 22% to 55 cents a share. Both measures topped BSX stock analysts' forecast for $3.59 billion and 51 cents, respectively.
Boston Scientific noted medical-surgical sales jumped 8.9% organically, while cardiovascular sales climbed 13.3%.
Within the medical-surgical segment, endoscopy sales jumped almost 11% on an organic basis to $645 million, while urology sales and revenue from neuromodulation devices rose a respective 9.9% and 2.6%. Neuromodulation is a means of using electrical pulses to treat pain.
For the year, Boston Scientific expects sales to climb 8% to 9% organically. It sees adjusted earnings of $2.23 to $2.27 per share. The Street projected earnings of $2.24 per share and $15.34 billion in sales. Kumar, who has an outperform rating on BSX stock, says the guidance could be conservative.
"While the overall annual range of 8% to 9% is below the (long-range plan) of 8% to 10%, this was well telegraphed as management had noted that the new product launches were all coming in the second half of the year," he said. "That said, we wonder if (the pulsed field ablation) launch could be slightly ahead of prior expectations for the second half of 2024."
Pulsed field ablation is another means of reading the heart's electrical activity. Boston Scientific also won Food and Drug Administration approval for a pulsed field ablation system called Farapulse on Wednesday.
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