Boston Scientific stock broke out Wednesday, helped by a strong second-quarter report on the back of its high-profile cardiovascular segment.
Cardiovascular sales surged more than 23% organically to $3.35 billion, beating expectations by 5%, Evercore ISI analyst Vijay Kumar said in a report. He credited massive growth from Farapulse and Watchman, products that, respectively, treat abnormal heart rhythm and reduce the risk of strokes.
Medical-surgical sales also topped forecasts and Boston raised its outlook for the year.
"This was another solid print by BSX and we think the headline (organic) Beat of ~200 bps vs ST was enough," Kumar said. "Almost all of the Beat was driven by Farapulse (pulsed field ablation) & Watchman, with Agent (drug coated balloon) acceleration offset by (transcatheter aortic heart-valve replacement) pullout."
Boston Scientific stock jumped 4.5%, closing at 107.77. Shares initially broke out of a flat base with a buy point at 107.06 on June 30, but later fell below that entry. The move Wednesday morning was enough to retake that buy point, MarketSurge shows.
Boston Scientific Stock: Massive Organic Growth
Across all products, Boston Scientific's sales grew almost 23% on a strict, as-reported basis to $5.06 billion, easily beating forecasts for $4.89 billion, according to FactSet. Adjusted earnings popped nearly 21% to 75 cents per share, topping calls by two pennies.
Organically, sales grew 17.4%, in line with analysts' forecast for 14.3%.
Notably, sales of its Farapulse system skyrocketed 117% in the U.S. Farapulse uses nonthermal electrical fields to surgically remove heart tissue. It treats atrial fibrillation. Watchman sales grew 28% worldwide. Watchman is an implantable device that helps prevent strokes in patients with atrial fibrillation.
The massive growth from those two products helped offset the loss of Boston Scientific's TAVR, or transcatheter aortic heart-valve replacements. This is a nonsurgical means of replacing a faulty aortic heart valve. Boston Sci pulled its TAVR device from Europe after its most recent clinical study in the U.S. failed.
Still, the company raised its outlook for the year and now expects sales to grow 18% to 19% on a strict, as-reported basis. That topped forecasts for a lower increase of 16.3% to $19.49 billion. The company also guided to adjusted profit of $2.95 to $2.99 a share, above calls for $2.92.
Boston also guided to 14% to 15% organic sales growth, beating forecasts for 13.25%.
Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.
