Boston Scientific BSX is gaining from new product launches and accretive acquisitions. Yet, unfavorable currency movement and macroeconomic concerns are major dampeners. The stock carries a Zacks Rank #3 (Hold).

Factors Driving BSX Shares

Boston Scientific’s Endoscopy business within MedSurg is witnessing strong growth in endoluminal surgery and single-use imaging franchises, along with sustained growth of the AXIOS platform, where the company is reinvesting to drive expanded indications. It recently received approval in Japan for AXIOS for gall bladder drainage. In endoluminal surgery, Boston Scientific is benefiting from positive reimbursement wins for its ESG weight loss procedure with the recently announced Category 1 CPT code and now IFSO, an International Bariatric Committee endorsing ESG with guideline updates.

Boston Scientific has been continuing its expansion of operations across different geographies outside the United States. In Europe, the Middle East and Africa (EMEA), Boston Scientific is successfully expanding its base banking on its diverse portfolio, new launches and commercial execution with healthy underlying market demand. In the fourth quarter, EMEA sales grew 11.6% year over year on an operational basis. During the quarter, the company launched its next-generation accurate Prime Valve in Europe. Further, an early contribution from the LUX-Dx II launch in Europe, as well as a strong FARAPULSE uptake in this region, drove growth.

Boston Scientific Corporation Price

Boston Scientific Corporation price | Boston Scientific Corporation Quote

We are also impressed by Boston Scientific’s recent acquisitions that have added numerous products (though many are under development) with immense potential. This, in turn, should help boost the top line in the long term. The company’s recently completed strategic buyouts include the acquisition of Cortex, an advanced AF mapping solution. The company also acquired Silk Road to broaden its presence in the field of vascular medicine. Boston Scientific also completed the acquisition of Axonics in the fourth quarter of 2024.

Over the past three months, shares of BSX have gained 19.4% against the industry’s 2.8% decline. The company’s consistent efforts to expand in international markets and an array of new product launches are expected to help the stock continue its uptrend in the coming days.

Concerning Factors for BSX

The industry-wide trend of difficult macroeconomic conditions in the form of geopolitical pressure leading to disruptions in economic activity, global supply chains and labor markets is creating a challenging business environment for Boston Scientific. With sustained macroeconomic pressure, the company may struggle to keep its operating expenses in check. In the fourth quarter of 2024, the company reported a 27.9% rise in the cost of products sold, leading to a 138-basis point contraction in gross margin. Further, there was a 16.9% rise in selling, general and administrative expenses, resulting in a mere 6 basis points expansion in operating margin.

Boston Scientific records 40% of its sales from the international market, which makes it highly exposed to currency fluctuations. Unfavorable currency movements have been a major dampener over the last few quarters, as in the case of other important MedTech players too. For 2025, the company expects a 100-basis point headwind from foreign exchange on revenues.

Further, the presence of a large number of players has made the medical devices market highly competitive. The company participates in several markets, including Cardiovascular, CRM, Endosurgery and Neuromodulation, where it faces competition from large, well-capitalized companies such as Johnson & Johnson, Abbott, Medtronic, Stryker, Smith & Nephew and Edwards Lifesciences, apart from several other smaller companies.

Key Picks

Some better-ranked stocks in the broader medical space are Omnicell OMCL, ResMed RMD and Phibro Animal Health PAHC.

Omnicell, carrying a Zacks Rank #2 (Buy) at present, has an estimated earnings growth rate of 72.7% for fourth-quarter 2024. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Omnicell's earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 121.74%. OMCL’s shares have risen 26.4% against the industry’s 15.7% decline in the past year. 

ResMed, carrying a Zacks Rank #2 at present, has an estimated growth rate of 21.1% for 2025. RMD’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 6.41%. Its shares have risen 34.1% compared with the industry’s 7.7% growth in the past year.

Phibro Animal Health carries a Zacks Rank #2. Its shares have risen 115.4% in the past year. Estimates for the company’s fiscal 2025 EPS have increased 4.3% to $1.69 in the past 30 days. PAHC’s earnings beat estimates in each of the trailing four quarters, the average surprise being 27.1%. In the last reported quarter, it posted an earnings surprise of 28.6%.

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