BSX
Boston Scientific Corporation
$49.59
Platform & Compounding FCF
85%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 8.1% below fair value
You pay
$49.59
Bear
$36.12
Fair
$53.98
Bull
$72.19
Bear
$36.12
-27.2%
7% stage 1 growth, 11% discount
Fair
$53.98
+8.8%
11% stage 1 growth, 11% discount
Bull
$72.19
+45.6%
15% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (11% base case)
Terminal Value % of EV
40%
Implied Market Multiple
24.5x
Market is pricing in (growth)
11.7%
vs 11.5% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $66.50 from 44 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $53.98 per share.
Warnings
Wall Street's average price target is $66.50 (from 44 analysts). Our estimate is 27% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions