Boston Scientific (BSX) reported Q2 revenue and EPS that beat expectations but lowered its full-year guidance, which was largely expected given known headwinds in its Electrophysiology and Watchman portfolio, as well as the base business generating 75% of the revenue growing at a rate of 6%, RBC Capital Markets said in a note Wednesday.
Management attributed the slowdown in Q2 Watchman procedures to compounding clinical evidence over the past nine months affecting referral patterns, particularly for soft-indication patients, as well as operational inefficiencies from the rapid adoption of Concomitant crowding out standalone growth, according to the note.
RBC said that H2 global Watchman adoption is expected to decline mid-to-high single digits, with US Q3 adoption declining mid-single digits sequentially.
Boston Scientific expects H2 global Electrophysiology adoption to be flat, with US Q3 volume declining mid-single digits sequentially. RBC sees management's EP commentary as positive and somewhat offsetting Watchman given the visibility into out-years.
RBC expects 2026 sales of $21.32 billion and adjusted EPS of $3.30.
RBC kept an outperform rating on Boston Scientific and lowered its price target to $70 from $85.
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