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Fed's Stagflation Fears Weigh, Yet Growth Factors Make BSX Stock a Buy
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Boston Scientific (BSX - Free Report) is experiencing a temporary cooling-off period after its strong run in 2024, where the stock climbed 54.5%, banking on robust financial performance and product advancements throughout the year. The stock's 3% decline so far in March can be attributed to broader market concerns, especially with the Fed's cautious stance on interest rates and economic conditions.
The Federal Reserve's warning about a potential “stagflationary” environment characterized by declining spending trends and persistent inflation has created uncertainty in the market. Additionally, while the Fed previously signaled two possible rate cuts in 2025, it recently opted to hold rates steady, dampening investor sentiment.
Beyond domestic economic uncertainty, global trade tensions have also become a significant risk factor for Boston Scientific. The company, with substantial operations in China and Europe, faces significant risks due to escalating global trade tensions in 2025. The U.S. administration's inconsistent tariff policies have created confusion among businesses, making it challenging for companies like Boston Scientific to navigate the shifting landscape.
Month-to-date, BSX has outperformed the Zacks Medical Products industry’s 4.4% decline and the S&P 500's 4.8% dip. The stock also remained above its direct peers and MedTech behemoths Abbott (ABT - Free Report) , which recorded an 8.4% decline during this period. However, the company’s other peer, Medtronic (MDT - Free Report) , remained ahead of BSX with a 1.8% drop.
MTD Stock Comparison
Image Source: Zacks Investment Research
BSX' Macroeconomic Jitters in a Nutshell
Tight Monetary Policy on Stagflation Warning: During its March 19, 2025, meeting, the Federal Reserve opted to maintain the federal funds rate at 4.25% to 4.50%, reflecting concerns over potential stagflation. Not only this, but the Fed has also increased its 2025 inflation forecast to 2.7%, up from the previous estimate of 2.5%, indicating expectations of continued price level rises. ???The 2025 real GDP growth projection was adjusted downward to 1.7% from 2.1%, suggesting a slowdown in economic expansion. ???Investors apprehend this to large impact companies like Boston Scientific, which rely on debt for R&D and acquisitions.
Trade War to Distort International Growth: Boston Scientific's extensive operations in China and Europe position it to be significantly affected by escalating global trade tensions in 2025. The company's strategic initiatives, such as establishing its first manufacturing site in Shanghai as part of its localization strategy and a five-year, $150 million investment to expand commercial operations in China, underscore its long-term plans to expand its foothold into these markets.???
However, since taking office, President Donald Trump has announced a multitude of tariff measures on various countries, including a range of tariffs on Chinese imports. In Europe, escalating trade tensions between the United States and the EU pose further risks. Given these developments, Boston Scientific, along with other MedTech majors like ABT and MDT, faces potential challenges, including increased operational costs, supply chain disruptions and reduced market access in these critical regions.
Yet BSX Continues to Gain Market Share in Core Businesses
Boston Scientific is consistently gaining market share within its MedSurg segment. The Endoscopy business within MedSurg is gaining from 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. Most recently, the company 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.
Within Urology, Boston Scientific continues to expand its market share globally. The company’s Stone management and prosthetic urology franchises are growing well, led by key launches with the TENACIO pump for the AMS 700 and continued success with the expanding LithoVue portfolio. Prostate Health also performed well in 2024, with double-digit growth in Rezum as well as strong performance in SpaceOAR.
Within Neuromodulation, Boston Scientific’s pain and brain businesses are gaining traction. Within deep brain stimulation, the company expects improving growth in 2025, backed by the recent FDA and CE Mark approvals of the Cartesia X and HX leads. The company also expects higher growth in its pain franchise in 2025, driven by continued strong momentum in Intercept and the recently-released data supporting safety, effectiveness and durability through five years now.
Promising Outlook for 2025
Boston Scientific expects organic revenue growth of 14% to 16% in the first quarter and 10% to 12% for the full year 2025, driven by its expanding portfolio and the global execution of strategies. The company forecasts first-quarter adjusted EPS between 66 cents and 68 cents. Full-year EPS is projected in the range of $2.80-$2.87, implying 12% to 14% growth over 2024.
Operational revenues are set to rise 18% to 20% in the first quarter, factoring in contributions from recent acquisitions. Despite minor headwinds from foreign exchange and tariffs, Boston Scientific anticipates 50 to 75 basis points in adjusted operating margin expansion. With a forecasted 12.5% adjusted tax rate and a manageable tariff impact, the company remains confident about sustaining differentiated financial performance throughout 2025.
The Pain and Brain franchises are particularly expected to gain solid traction in 2025 due to the strong execution of core growth strategies. The Electrophysiology arm is expected to gain momentum on the sustained adoption of FARAPULSE PFA.
How Are Estimates Placed for BSX?
The Zacks Consensus Estimate for 2025 EPS has increased over the past 60 days, following 11 upward estimate revisions, as shown in the chart below. The estimated figure indicates 2.9% growth from the year-ago reported figure.
Image Source: Zacks Investment Research
BSX Stock Returns Higher Than the Industry
BSX’s trailing 12-month return on equity of 17.8% is better than its industry average of 17.3%. This depicts that the company is more efficient at generating profits from its shareholders' investments than its competitors.
Image Source: Zacks Investment Research
Strong Price Upside
Based on short-term price targets by 28 analysts, Boston Scientific's average target price is $118.57, reflecting a 17.8% potential upside from its last closing price of $100.69.
Image Source: Zacks Investment Research
BSX a Buy Now
Boston Scientific's extensive operations in China and Europe expose it to the adverse effects of current global trade tensions. The imposition of tariffs on medical devices and related materials, coupled with the unpredictable nature of trade policies, poses significant risks to the company's supply chain and overall business performance in 2025. Further, macroeconomic headwinds like high interest rates may be limiting investor enthusiasm.
Yet, a strong international position, strategic acquisitions and expansion in emerging markets drive long-term potential despite economic uncertainties. Further, a positive estimate revision trend and with an average price target of $118.57, analysts see a strong upside potential, reinforcing this Zacks Rank #2 (Buy) stock’s attractiveness.
Image: Bigstock
Fed's Stagflation Fears Weigh, Yet Growth Factors Make BSX Stock a Buy
Boston Scientific (BSX - Free Report) is experiencing a temporary cooling-off period after its strong run in 2024, where the stock climbed 54.5%, banking on robust financial performance and product advancements throughout the year. The stock's 3% decline so far in March can be attributed to broader market concerns, especially with the Fed's cautious stance on interest rates and economic conditions.
The Federal Reserve's warning about a potential “stagflationary” environment characterized by declining spending trends and persistent inflation has created uncertainty in the market. Additionally, while the Fed previously signaled two possible rate cuts in 2025, it recently opted to hold rates steady, dampening investor sentiment.
Beyond domestic economic uncertainty, global trade tensions have also become a significant risk factor for Boston Scientific. The company, with substantial operations in China and Europe, faces significant risks due to escalating global trade tensions in 2025. The U.S. administration's inconsistent tariff policies have created confusion among businesses, making it challenging for companies like Boston Scientific to navigate the shifting landscape.
Month-to-date, BSX has outperformed the Zacks Medical Products industry’s 4.4% decline and the S&P 500's 4.8% dip. The stock also remained above its direct peers and MedTech behemoths Abbott (ABT - Free Report) , which recorded an 8.4% decline during this period. However, the company’s other peer, Medtronic (MDT - Free Report) , remained ahead of BSX with a 1.8% drop.
MTD Stock Comparison
Image Source: Zacks Investment Research
BSX' Macroeconomic Jitters in a Nutshell
Tight Monetary Policy on Stagflation Warning: During its March 19, 2025, meeting, the Federal Reserve opted to maintain the federal funds rate at 4.25% to 4.50%, reflecting concerns over potential stagflation. Not only this, but the Fed has also increased its 2025 inflation forecast to 2.7%, up from the previous estimate of 2.5%, indicating expectations of continued price level rises. ???The 2025 real GDP growth projection was adjusted downward to 1.7% from 2.1%, suggesting a slowdown in economic expansion. ???Investors apprehend this to large impact companies like Boston Scientific, which rely on debt for R&D and acquisitions.
Trade War to Distort International Growth: Boston Scientific's extensive operations in China and Europe position it to be significantly affected by escalating global trade tensions in 2025. The company's strategic initiatives, such as establishing its first manufacturing site in Shanghai as part of its localization strategy and a five-year, $150 million investment to expand commercial operations in China, underscore its long-term plans to expand its foothold into these markets.???
However, since taking office, President Donald Trump has announced a multitude of tariff measures on various countries, including a range of tariffs on Chinese imports. In Europe, escalating trade tensions between the United States and the EU pose further risks. Given these developments, Boston Scientific, along with other MedTech majors like ABT and MDT, faces potential challenges, including increased operational costs, supply chain disruptions and reduced market access in these critical regions.
Yet BSX Continues to Gain Market Share in Core Businesses
Boston Scientific is consistently gaining market share within its MedSurg segment. The Endoscopy business within MedSurg is gaining from 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. Most recently, the company 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.
Within Urology, Boston Scientific continues to expand its market share globally. The company’s Stone management and prosthetic urology franchises are growing well, led by key launches with the TENACIO pump for the AMS 700 and continued success with the expanding LithoVue portfolio. Prostate Health also performed well in 2024, with double-digit growth in Rezum as well as strong performance in SpaceOAR.
Within Neuromodulation, Boston Scientific’s pain and brain businesses are gaining traction. Within deep brain stimulation, the company expects improving growth in 2025, backed by the recent FDA and CE Mark approvals of the Cartesia X and HX leads. The company also expects higher growth in its pain franchise in 2025, driven by continued strong momentum in Intercept and the recently-released data supporting safety, effectiveness and durability through five years now.
Promising Outlook for 2025
Boston Scientific expects organic revenue growth of 14% to 16% in the first quarter and 10% to 12% for the full year 2025, driven by its expanding portfolio and the global execution of strategies. The company forecasts first-quarter adjusted EPS between 66 cents and 68 cents. Full-year EPS is projected in the range of $2.80-$2.87, implying 12% to 14% growth over 2024.
Operational revenues are set to rise 18% to 20% in the first quarter, factoring in contributions from recent acquisitions. Despite minor headwinds from foreign exchange and tariffs, Boston Scientific anticipates 50 to 75 basis points in adjusted operating margin expansion. With a forecasted 12.5% adjusted tax rate and a manageable tariff impact, the company remains confident about sustaining differentiated financial performance throughout 2025.
The Pain and Brain franchises are particularly expected to gain solid traction in 2025 due to the strong execution of core growth strategies. The Electrophysiology arm is expected to gain momentum on the sustained adoption of FARAPULSE PFA.
How Are Estimates Placed for BSX?
The Zacks Consensus Estimate for 2025 EPS has increased over the past 60 days, following 11 upward estimate revisions, as shown in the chart below. The estimated figure indicates 2.9% growth from the year-ago reported figure.
Image Source: Zacks Investment Research
BSX Stock Returns Higher Than the Industry
BSX’s trailing 12-month return on equity of 17.8% is better than its industry average of 17.3%. This depicts that the company is more efficient at generating profits from its shareholders' investments than its competitors.
Image Source: Zacks Investment Research
Strong Price Upside
Based on short-term price targets by 28 analysts, Boston Scientific's average target price is $118.57, reflecting a 17.8% potential upside from its last closing price of $100.69.
Image Source: Zacks Investment Research
BSX a Buy Now
Boston Scientific's extensive operations in China and Europe expose it to the adverse effects of current global trade tensions. The imposition of tariffs on medical devices and related materials, coupled with the unpredictable nature of trade policies, poses significant risks to the company's supply chain and overall business performance in 2025. Further, macroeconomic headwinds like high interest rates may be limiting investor enthusiasm.
Yet, a strong international position, strategic acquisitions and expansion in emerging markets drive long-term potential despite economic uncertainties. Further, a positive estimate revision trend and with an average price target of $118.57, analysts see a strong upside potential, reinforcing this Zacks Rank #2 (Buy) stock’s attractiveness.
You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.