Boston Scientific Corporation (NYSE:BSX) BSX is scheduled to report third-quarter 2020 results on Oct 28, before the opening bell.
In the last reported quarter, the company reported earnings per share of 8 cents against the Zacks Consensus Estimate of a loss of 4 cents per share. It beat estimates in three of the trailing four quarters and missed in one. The trailing four-quarter average earnings surprise is 73.01%.
Factors at Play
Top-line growth is likely to have improved from the last reported quarter as Boston Scientific had started to appropriately invest in virtual physician education, remote clinical support and digital sales enablement suitable for healthcare support amid the pandemic. Per the company’s Jul 29 update, with all these, it has started to see month-wise recovery.
In addition, from the month of June, China, Australia, New Zealand and Korea all delivered year-over-year growth. Six countries in Europe, Middle East, Africa returned to growth as well in June. With gradual relaxation of country-wise lockdown restrictions and following the recovery in international trade through the months of the third quarter, the company’s international business is expected to have registered higher growth compared with the second quarter.
Within Interventional Cardiology (IC) business, there was month-wise improvement from May to July with consistent improvement in LOTUS EDGE and WATCHMAN. In the third quarter, Boston Scientific received approval for multiple product launches across major markets, including WATCHMAN FLX. We believe to see this month wise recovery trend in sales when the company reports.
Within the Peripheral Interventions (PI) business, third-quarter sales are expected to have been more resilient to the pandemic with less-deferrable procedures. The company arranged Arterial, Venous and Interventional Oncology in order of highest to lowest mix of deferrable procedures.
Further, a higher mix of non-deferrable procedures is expected to have aided the company’s third-quarter MedSurg sales. Within Urology/Pelvic Health, sales from the company’s stone franchise and SpaceOAR products have shown better resilience. Boston Scientific continues to expect urology/ pelvic health to have one of the faster potential recovery curves, aided by a higher office ASE mix for most elective procedures.
Within Endoscopy, recovery started from June, leveraging on a favorable mix of both relatively high acuity and outpatient side of service. ERCP procedures for the pancreas and bile ducts are expected to report trend improvement as stone removal and tumor biopsies typically cannot be deferred for more than four to six weeks.
Q3 Estimates
The Zacks Consensus Estimate for third-quarter total revenues of $2.52 billion suggests decline of 6.9% from the prior-year reported number. The consensus mark for adjusted earnings of 25 cents per share implies 35.9% decline from the year-ago reported figure.
What Our Quantitative Model Predicts
Per our proven model, a stock with a combination of a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, has a good chance of beating estimates. This is not the case as you can see:
Earnings ESP: Boston Scientific has an Earnings ESP of -5.72%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Boston Scientific carries a Zacks Rank #2.
Stocks to Consider
Here are a few medical stocks worth considering as these have the right combination of elements to beat on earnings this time around.
Humana HUM currently has a Zacks Rank #2 and an Earnings ESP of +3.35%.
IDEXX Laboratories IDXX has an Earnings ESP of +0.35% and is a Zacks #2 Ranked stock. You can see the complete list of today’s Zacks #1 Rank stocks here.
LHC Group (NASDAQ:LHCG) LHCG has an Earnings ESP of +1.85% and a Zacks Rank of 2, at present.
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