Key insights
- Boston Scientific (BSX) shares have seen a significant decline due to repeated downward revisions in growth expectations, particularly concerning its Watchman heart implant procedures. Despite bearish sentiment from management, a majority of analysts maintain buy ratings and a consensus price target suggesting 65% upside. However, achieving this target hinges on a faster-than-expected growth recovery and potential valuation rerating, with risks of further price target reductions if Q2 results and guidance disappoint.
Boston Scientific (BSX 0.55%) shares have performed poorly in recent months. Year to date, shares in the medtech company have fallen by over 50%.
It's not surprising shares have fallen so far, so fast. Boston Scientific has kept walking back growth expectations all year. However, with the analyst community far more upbeat about it than the market, let's explore this beaten-down healthcare stock's comeback potential.
In February, Boston Scientific's management guided organic sales growth of 10% to 11%. But as 2025 growth was 19.5%, investors reacted poorly to the outlook. Worse yet, management has kept making downward adjustments.
In April, management lowered full-year 2026 organic revenue guidance to between 6.5% and 8%. Then, in late May, management walked things back once again. Citing "the declining usage of Watchman stand-alone procedures," or procedures using Boston Scientific's Watchman heart implant, CEO Michael Mahoney noted that the company will likely report "flat dollar growth from first quarter to second quarter, and likely in the third quarter."
Analyst sentiment has shifted bearish, but 27 out of the 31 analysts covering the stock still give it the equivalent of a buy rating. Not only that, the consensus price target of $78 per share represents potential upside of 65%.
While it's plausible that shares could recover on better-than-expected results, even a partial recovery to $78 per share could prove challenging. Boston Scientific currently trades at a forward valuation in the mid-teens, in line with other medical device stocks, such as Abbott Laboratories and Medtronic. A rerating to a premium valuation will likely require a faster-than-expected recovery in growth. Worse yet, depending on Q2 results and guidance, these high price targets could trend lower.
For now, take this wide spread between stock price and price target with a grain of salt.