BSX Stock Study (5-12-26)

Posted by Mark on April 30, 2026 at 07:49 | Last modified: May 12, 2026 10:39

I recently did a stock study on Boston Scientific Corp. (BSX, $53.37).

M* writes:

     > Boston Scientific produces less invasive medical devices that
     > are inserted into the human body through small openings
     > or cuts. It manufactures products for use in angioplasty,
     > blood clot filtration, kidney stone management, cardiac
     > rhythm management, catheter-directed ultrasound imaging,
     > upper gastrointestinal tract diagnostics, interventional
     > oncology, neuromodulation for chronic pain, and treatment
     > of incontinence. The firm markets its devices to healthcare
     > professionals and institutions globally. Foreign sales
     > account for roughly 36% of the firm’s total sales.

Over the past decade, this large-size company grows sales and EPS at annualized rates of 9.2% and 20.8%, respectively. Lines are up, straight, and parallel since 2022 but a bit “wonky” before that. I am excluding 2020 from the full analysis due to negative EPS (massive reduction in elective procedures due to COVID-19). 2019 EPS shows a massive boost due to a deferred tax benefit from internal transfer of assets (intellectual property) between legal entities. The adjusted EPS line is much smoother, increasing every year except ’20 at an average rate of 11.9%. Five- (10-) year EPS R^2 is 0.76 (0.29) and Value Line (VL) gives an Earnings Predictability score of 75. Shares outstanding increase 8.5% (0.9%/year).

Over the past decade, PTPM trails peer and industry averages despite increasing from 2.1% to 16.9% (’25) with a last-5-year mean of 12.5%. ROE trails peer and industry averages while increasing from 5.3% to 12.3% (’25) with a last-5-year mean of 7.8% (shareholder equity positive and consistently growing). Debt-to-Capital is less than peer and industry averages while falling from 44.9% to 32.1% (’25) with a last-5-year mean of 34.0%.

Quick Ratio is 0.98 and Interest Coverage 11.5 per M* who assigns “Narrow” Economic Moat, “Standard” rating for Capital Allocation, and a B grade for Financial Health (per BetterInvesting® website). VL rates the company A for Financial Strength.

With regard to sales growth:

• YF gives YOY ACE 8.0% and 8.9% for ’26 and ’27 (based on 28 analysts).
• Zacks gives YOY ACE 8.0% and 8.9% for ’26 and ’27, respectively (11 analysts).
• VL gives 5.3% per year from ’25-’30.
• CFRA gives ACE 8.6% YOY and 10.7% per year for ’26 and ’25-’27, respectively.
• M* gives 2-year ACE of 9.1% per year and projects 5-year annualized 8.4% in Equity Report.

I am forecasting below the range at 5.0% per year.

With regard to EPS growth:

• MarketWatch projects 13.7% and 13.6% per year for ’25-’27 and ’25-’28, respectively (based on 37 analysts).
• Nasdaq.com gives ACE 10.5% and 10.4% per year for ’26-’28 and ’26-’29 (13 / 6 / 3 analysts for ’26 / ’28 / ’29).
• Seeking Alpha projects 4-year annualized of 15.4%.
• Finviz gives ACE 5-year annualized of 11.4% (8).
• Argus gives 5-year annualized of 10.0%.
• LSEG projects LTG of 10.8%.
• YF gives YOY ACE 10.4% and 11.4% for ’26 and ’27, respectively (29).
• Zacks gives YOY ACE 10.5% and 11.0% for ’26 and ’27, respectively, and 5-year annualized of 16.2% (13).
• VL gives 6.8% annualized from ’25-’30.
• CFRA projects 11.1% YOY and 14.9% per year for ’26 and ’25-’27 along with 3-year CAGR of 13.0%.
• M* gives ACE long-term 24.6%/year but projects 9.2% annualized [adjusted] from ’25-’30 in Equity Report.

My 6.0% forecast is below the long-term-estimate range (mean of eight: 13.1%). Initial value is ’25 EPS of $1.94/share rather than 2026 Q1 $2.39 (TTM).

My Forecast High P/E is 35.0. Since 2018 (excluding near-triple-digit values or higher: 99.2 in ’16, 374 in ’17, and 107 in ’22), high P/E increases from 33.1 to 56.4 (’25) with a last-5-year mean of 62.9 and last-5-year-mean average (excluding same three years for low) P/E of 54.1. I am below all but 14.0 in ’19 and 33.1 in ’18.

My Forecast Low P/E is 21.0. Since 2018 (same years excluded as above), low P/E increases from 20.9 to 44.3 (’25) with a last-5-year mean of 45.4. I am forecasting near bottom of the range (9.8 in ’19 and 20.9 in ’18 are less).

My Low Stock Price Forecast (LSPF) of $40.70 is based on initial value from above. That is 23.7% less than previous close and 23.4% less than the 52-week low.

These inputs land BSX at cusp of the BUY zone with a U/D ratio of 3.0. Total Annualized Return (TAR) is 11.3%.

PAR (using Forecast Average—not High—P/E) of 6.4% is less than I seek for a large-size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.

To assess MOS, I start by comparing my inputs with those of Member Sentiment (MS). Based on 105 studies done in the past 90 days (38 outliers excluded including mine), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, and Forecast Low P/E are 9.6%, 13.8%, 40.0, and 30.0, respectively. I am lower across the board. VL [M*] projects a future average P/E of 25.0 [11.5, which seems unreasonably low]: less than MS (35.0), less than mine (28.0), and less than its own previous quarterly report (32.0).

MS high / low EPS are $3.90 / $1.94 versus my $2.60 / $1.94 (per share). My high EPS is less due to a lower growth rate. VL (M*) high EPS of $4.25 ($4.65 adjusted) is greater than both.

MS LSPF of $53.40 (INVALID on today’s date) implies a Forecast Low P/E of 27.5: less than the above-stated 30.0. MS LSPF is 8.3% less than the default $1.94/share * 30.0 = $58.20 that results in more conservative zoning. MS LSPF exceeds mine by 31.2%, however.

MOS is robust in the study because my inputs are less than or near bottom of historical/analyst/MS averages/ranges. Also backing this assessment is MS TAR exceeding mine by 8.9% (too high, really) per year and my lower LSPF.

Regarding valuation, PEG is 0.98 and 3.5 per Zacks and my projected P/E, respectively: a bit overvalued (M* has 0.29, which seems unreasonably low). Relative Value [(current P/E) / 5-year-mean average P/E] is exceedingly low at 0.41 (even with all upside outliers removed). “Quick and Dirty” DCF calculates the stock undervalued by 34%, precisely matching M* assessment.

BSX makes for a challenging stock study because of the GAAP/adjusted EPS differences and because the historical P/E data is so scattered. I feel I’ve discounted my inputs substantially throughout, though. If adjusted numbers are used to forecast future EPS, then the current study is well into the BUY zone.

Per U/D, BSX is a virtual BUY right now. Given a forecast high price of $91, BetterInvesting® TAR criterion would be met at [91.0 / ((14.87 / 100 ) +1 ) ^ 5] = $45.50 (no dividend).

A 90-day free trial to BetterInvesting® may be secured here (also see link under “Pages” section at top right of this page).