Fitch Ratings has confirmed Boston Scientific Corporation's Long-Term Issuer Default Rating at 'A-' and Short-Term rating at 'F1', simultaneously revising the company's outlook from Stable to Positive. This change comes after Fitch removed Boston Scientific from its prior Under Criteria Observation status, which had been applied following the publication of its Corporate Rating Criteria on January 9.
The Positive Outlook assigned by Fitch reflects confidence in Boston Scientific's solid business profile, suggesting that the company could achieve an upgrade to a full 'A' rating once its financial standings stabilize in light of the recently announced acquisition of Penumbra Inc. for $15 billion.
Fitch projects Boston Scientific will realize strong top-line expansion during the assessment period, anticipating 2025 revenues near $20 billion. This projected figure represents about a 20% increase compared to the previous year and surpasses both the company’s original guidance range of 12.5% to 14.5% and Fitch’s own forecast of 14% growth.
The acquisition of Penumbra represents a significant transaction exceeding Boston Scientific’s typical deal size but aligns strategically with the company's goal of penetrating adjacent markets exhibiting higher growth rates. Penumbra operates in markets growing at an average rate of approximately 11%, which contrasts with Boston Scientific’s existing market growth of 8%.
Regarding financial leverage, Fitch expects that Boston Scientific's adjusted EBITDA leverage ratio will ascend to roughly 3.3 times by the end of 2026, assuming the Penumbra acquisition is finalized within this period. Afterwards, the leverage ratio is projected to decline to 2.4 times by the end of 2027, driven by debt repayments and earnings growth.
Additionally, Fitch anticipates a substantial increase in Boston Scientific’s annual free cash flow, projecting an uplift from $1.7 billion in 2023 to about $4 billion by 2026. This improvement is expected to be supported by effective working capital management and operating income growth.
Boston Scientific continues to concentrate on markets with rapid expansion, which currently constitute about 55% of its revenue base. The company aims to raise this proportion to 60% by 2028, sustaining an overall weighted-average market growth rate of 9%.