Wells Fargo cuts Boston Scientific to ’Equal Weight’ on Watchman slowdown
Investing.com -- Wells Fargo has downgraded Boston Scientific to “Equal Weight” from “Overweight,” citing growing uncertainty around the medical device maker’s two key growth drivers — its electrophysiology (EP) business and the Watchman heart implant franchise.
The bank also slashed its price target to $55 from $75, implying more limited upside from the stock’s recent close at $50.46.
The downgrade follows Boston Scientific’s decision to lower guidance for its Watchman device, which is used to reduce stroke risk in atrial fibrillation patients. The company now expects U.S. Watchman sales to remain sequentially flat in the second and third quarters of 2026, instead of growing at a mid-to-high single-digit pace as previously forecast. Wells Fargo estimates this implies a roughly 2% year-over-year decline in U.S. Watchman sales in the third quarter.
Analysts warned that the slowdown may persist for “several months and quarters,” especially as standalone procedures decline. The bank now forecasts 2026 U.S. Watchman revenue of about $1.86 billion, representing just 4% annual growth.
Competitive pressures are also mounting. Several upcoming catalysts that could threaten Boston Scientific’s leadership in left atrial appendage closure (LAAC), including future launches and trial data from rivals such as Abbott Laboratories, Bristol Myers Squibb and Johnson & Johnson. However, there is a growing optimism around the anticoagulant milvexian, which could reduce demand for Watchman procedures if it demonstrates lower bleeding risk with similar efficacy to Eliquis.
Market experts have raised concerns about Boston Scientific’s EP division, where the company is expected to face intensifying competition in pulsed-field ablation technologies beginning in 2028. Wells Fargo said rivals including Medtronic and Johnson & Johnson appear to have a “significant head start” on next-generation products, while Boston Scientific’s Faraflex program has been delayed.
Beyond EP and Watchman, analysts flagged weakness in several other business lines. The company’s cardiac rhythm management segment continues to lag as its Empower leadless pacemaker has been delayed until 2027, while the urology division faces pressure from slowing AXNX growth and increased competition in stone management products.
Wells Fargo also cautioned that Boston Scientific’s planned acquisition of PEN could face integration and regulatory risks, potentially requiring divestitures of products with combined sales of up to $250 million.
Wells Fargo lowered its 2026 earnings-per-share estimate slightly to $3.37 from $3.39 and cut its 2027 estimate to $3.69 from $3.74, while trimming organic sales growth forecasts for both years.