Investing.com -- Moody’s Ratings has upgraded the ratings of Boston Scientific Corporation (NYSE: BSX ) and its wholly owned subsidiary, American Medical Systems Europe B.V. ( AMS (VIE: AMS2 ) Europe). The upgraded ratings include Boston Scientific’s senior unsecured notes, senior unsecured global notes, senior unsecured shelf registration, and AMS Europe’s backed senior unsecured notes and shelf registration. All these ratings were upgraded to A3 from Baa1, while their outlook was revised from positive to stable.
The upgrade in ratings is a reflection of Moody’s expectation of Boston Scientific’s continued strong operating performance, with sustained revenue growth and free cash flow expansion that bolsters its acquisition strategy. The credibility and track record of the management, along with their financial strategy and risk management, were key considerations in this rating action.
Boston Scientific’s A3 ratings are indicative of its significant global scale with annual revenues nearing $18 billion. The company enjoys good diversification outside its cardiovascular business with leading market positions in key product franchises. The successful commercialization of products like Watchman and Farapulse has resulted in market-leading growth in recent periods. The ratings also take into account the company’s conservative financial policies, including a gross debt/EBITDA leverage target of 2.25x-2.5x.
However, the ratings are limited by moderate revenue concentration in the cardiovascular space. The company faces intense competition from larger companies in this area. As a high-tech medical device company, Boston Scientific is exposed to risks such as product recalls, regulatory delays, supply chain disruptions, and technological obsolescence. The company also has a high ongoing appetite for acquisitions, which could potentially result in a substantial increase in financial leverage. As of March 31, 2025, the gross debt/EBITDA was approximately 2.3x.
The stable outlook reflects Moody’s expectations for rising earnings and cash flow, balanced by Boston Scientific’s ongoing acquisition appetite. Factors that could lead to an upgrade include continued strong operating results, margin expansion, and increased business diversification and scale. On the other hand, factors that could lead to a downgrade include a shift toward more aggressive financial policies or unforeseen operating setbacks.
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