RBC Confident That Boston Scientific Is A Multi-Year Revenue Growth Story

Following a roadshow with CFO Dan Brennan of Boston Scientific Corporation BSX, RBC Capital’s Glenn Novarro expressed confidence regarding the company being a “multi-year revenue growth story, led by a deep pipeline.”

Novarro maintains an Outperform rating on the company, with a price target of 25.

The Growth Story

The analyst also expressed confidence in the management’s ability to “deliver meaningful operating margin expansion and low- to mid-teens EPS growth.”

Novarro believes that the near-term CRM headwinds are likely to reverse, with Boston Scientific filling in the key product gaps.

Novarro mentioned that Brennan had reaffirmed the product launch schedule for MRI-safe Emblem S-ICD in 3Q16 and MRI-safe traditional ICD in mid-2017.

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“Both of these product launches, coupled with the recent approvals for the X4 Quadripolar system and MRIsafe pace, should help fill the MRI-safe CRM product gap and fuel 2H16/2017 CRM market share gains,” according to the RBC Capital report.

Synergy Share Gains

The company’s cardiovascular results for 1Q16 beat expectations, driven partly by U.S. share gains for Synergy. The CFO noted that Synergy was being well received by the interventional cardiology community.

“The rollout of the device appears to be well ahead of expectations, and Synergy seems to be capturing not only market share but also a premium price in the market,” Novarro noted.

Brennan also reaffirmed Boston Scientific’s commitment to achieving operating margins of 25 percent by 2017, as well as the long term goal of expanding operating margins to 28–30 percent.