TLDR
- Boston Scientific reports Q2 earnings on July 29, with analyst focus on its heart device portfolio.
- The company launched a restructuring plan approved July 21, expected to cost $700M–$800M before taxes.
- The plan involves supply chain changes, factory shifts, and job cuts, running through end of 2029.
- Annual savings of ~$500M are expected once fully implemented, with much reinvested into growth.
- Wall Street expects revenue to grow 5.9% year on year this quarter, down from 22.8% growth a year ago.
Boston Scientific reports Q2 earnings on Wednesday, July 29. The current stock price sits at $45.55, against an average analyst price target of $72.25.
Boston Scientific Corporation, BSX
Wall Street is expecting revenue growth of 5.9% year on year this quarter. That’s a sharp slowdown from the 22.8% growth BSX posted in the same quarter last year.
Last quarter, Boston Scientific reported revenues of $5.20 billion, up 11.6% year on year. That beat analyst revenue expectations, though revenue guidance for the following quarter came in below estimates.
Analysts have largely held their estimates steady over the past 30 days. Boston Scientific has a track record of beating Wall Street’s expectations, so that consistency is worth watching.
The stock is up 4.6% over the last month. The broader healthcare equipment and supplies segment is up 1.9% over the same period.
Restructuring Plan Details
On Monday, Boston Scientific filed notice that its board approved a company-wide restructuring plan on July 21. The plan covers supply chain optimization, moving production between factories, and reorganizing the company’s structure.
The changes are expected to start this year and be largely complete by the end of 2029.
The company expects the plan to cost between $700 million and $800 million before taxes. Of that, $600 million to $700 million is expected to be paid out in cash.
Job cuts are part of the plan. The company said it will still be hiring in growth areas and reallocating resources to meet global demand.
Once fully in place, Boston Scientific expects to cut annual expenses by around $500 million. The company said much of those savings will be reinvested into growth initiatives.
BSX stock was up 2.85% on Monday following the restructuring announcement.
Peer Comparison
Peers in the healthcare equipment and supplies space have already posted their Q2 results, giving some context ahead of Wednesday.
Abbott Laboratories reported revenue growth of 13% year on year, beating estimates by 0.7%. The stock traded up 12.8% after those results.
Intuitive Surgical reported revenues up 18.5%, topping estimates by 2.5%. Its stock dropped 14.1% following the report despite the beat.
Investor reaction to earnings in this space has been mixed, which keeps the setup for BSX somewhat unpredictable heading into Wednesday.
The average analyst price target for BSX stands at $72.25 versus the current price of $45.55.
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