The pandemic shook medtech companies, with procedures cut and elective surgeries pushed off until “later.” That later time is here and helping to drive results for several companies. Boston Scientific Corp. (NYSE: BSX), Dexcom Inc. (NASDAQ: DXCM) and Intuitive Surgical Inc. (NASDAQ: ISRG) have all gotten attention from analysts who see normalization and growth in the forecast.
Boston Scientific Leads the Group
Boston Scientific Corp. leads the group on good news, including results, approvals and acquisitions. The takeaway is that growth is present, acquisitions are boosting growth and new products are coming to market. The latest product approval is for LithoVue Elite, a single-use ureteroscope perfect for diagnosing kidney stones and other ailments. The kidney stone market is worth more than $2 billion, and diagnosis is a large part of the cost.
What this means for the BSX stock is a series of upgrades and price target increases that set all-time highs. Boston Scientific got a triple-shot of good news when Raymond James, Truist and BTIG Research raised their price targets on the same day. Their consensus is near $57 compared to the $53 Marketbeat.com consensus, which assumes the stock is fairly valued at current levels. The takeaway is that the price target should increase, and the new targets are well into the all-time high territory.
Boston Scientific reports quarter one earnings in late April and should grow revenue and earnings compared to last year. Sold results could extend the trend of price target increases and price action.
Dexcom: A Medtech Dynamic Growth Story
Raymond James analysts called out Dexcom after reviewing the medtech industry. The review reexamined the impact of COVID-19 on the industry, and Dexcom emerged as a dynamic growth story while also giving the nod to Boston Scientific. In their view, COVID-19 disrupted the natural growth patterns, but those are expected to return. That means 5% to 10% top-bottom line growth, and business is expected to accelerate in the second half of 2023. For Dexcom, which focuses on continuous glucose monitoring for diabetics, it means accelerated adoption of this much-needed and highly-appreciated technology.
Dexcom has 13 analysts covering its stock, and they are pushing it higher. The price target is down compared to last year but up compared to last quarter and last month, positively affecting the stock price. The stock price has been trending sideways since mid-2022 but appears well-supported and ready to move higher. The first-quarter earnings report is due at the end of April and may provide the proper catalyst.
Intuitive Surgical: Outperformance in the Works?
Intuitive Surgical is expected to post a year-over-year gain in revenue and earnings that may underestimate the company by a wide margin. The company has been accelerating its business sequentially for four quarters and shows no signs of slowing down. The largest segment, instruments and accessories, was the primary driver of strength in the last report, and that is expected to continue with the post-COVID increase in procedure volume. Analysts have weighed on the share price over the last year, but that trend changed. The latest commentaries include boosted targets that have helped put a bottom in the stock.
