What Can Investors Expect from Boston Scientific's 1Q16 Earnings?
Analysts’ recommendations
Boston Scientific (BSX) is set to release its 1Q16 earnings results on April 27, 2016. In a Bloomberg survey of 28 brokerage firms on April 24, 2016, about 78.6% of the firms rated Boston Scientific as a “buy” and 21.4% rated the company as a “hold.” None of the firms rated Boston Scientific as a “sell.”
The above table lists 22 brokerage firms that provided a target price for Boston Scientific over the next 12 months. The consensus 12-month target price for the company is $21.29. It amounts to a 7.7% return potential.
In comparison, peers Medtronic (MDT), St. Jude Medical (STJ), and Zimmer Biomet Holdings (ZBH) have 12-month return potentials of ~9.3%, 11.7%, and 6.8%, respectively.
Share price movement
As of April 22, 2016, Boston Scientific was trading 39.5% above its 52-week low and 0.4% below its 52-week high. The company’s stock price rose by ~7.7% over the last 12 months. Since the release of the company’s 4Q15 earnings on February 4, 2016, Boston Scientific’s share price rose by ~14%. It reached $19.7 on April 22, 2016.
Boston Scientific manufactures products used for interventional medical therapies in the area of electrophysiology, endoscopy, interventional cardiology, neuromodulation, rhythm management, peripheral interventions, and urology and pelvic heath. Interventional cardiology products generate the highest revenue for the company. They contributed ~27% of the total revenue the company generated in 2015. CRM (cardiac rhythm management) is the next largest revenue segment. However, it faced severe challenges in 2015 due to competitive launches in the US and replacement cycle headwinds. These factors are expected to impact its 1Q16 revenue as well. Continued currency headwinds are also expected to weigh down Boston Scientific’s performance in 1Q16. However, in 1Q16, the strong product pipeline and geographical expansion along with the company’s plant network optimization strategy—which was completed towards the end of 2015—are expected to partially offset the negative impact of currency, CRM headwinds, and yield margin expansion. They should boost revenues.
Investors seeking focused exposure to Boston Scientific can invest in the iShares US Medical Devices ETF (IHI). Boston Scientific accounts for 4.8% of IHI.
Browse this series on Market Realist: