Boston Scientific Corp. (NYSE:BSX) experienced a sharp market reaction Wednesday after senior management lowered its organic growth forecast for the year while speaking at a Bernstein event. The stock declined by over 6% following the guidance reduction.
Management adjusted the company's full-year organic growth guidance to a range of 6.5% to 8.0%. For the second quarter, the company set guidance between 5% and 7%. Company leadership said it is comfortable operating within those updated ranges and reiterated an expectation of margin improvement together with double-digit growth in earnings per share despite the trimmed outlook.
The guidance revision stems from several business-specific challenges. Executives pointed to a slowdown in standalone WATCHMAN procedures, weaker-than-expected performance in the urology segment and reduced Electrophysiology guidance tied to competitor product launches.
On WATCHMAN, Boston Scientific continues to hold an estimated 91% market share, yet management reported a decline in standalone procedures. The slowdown is partly attributed to competitive pressures and workflow issues, and the company expects WATCHMAN dollar growth to be roughly flat from the first quarter into the second quarter and likely into the third quarter as well.
In Electrophysiology, where Boston Scientific ranks as the second-largest player globally, management said the company expects to keep PFA market-share leadership. That said, they acknowledged the company could lose some share as competitors introduce new products, which contributed to the lowered Electrophysiology guidance.
The urology business was described as facing headwinds from niche and price competitors within its core stone portfolio. Management also noted commercial disruption tied to Axonics in the urology channel. To address these challenges, the company has added roughly 100 clinical and sales representatives focused on improving performance in the Axonics urology business.
Looking ahead, Boston Scientific plans to update its three-year long-range plan - including projections for fiscal 2027 and 2028 - following its third-quarter earnings call. The company also signaled continued investment in innovation, allocating more than 9% of revenue to internal organic research and development and maintaining what it described as the largest venture fund in MedTech.
Market reaction - Shares fell more than 6% on the day of the announcement as investors absorbed the lowered near-term growth outlook despite management's pledge to drive margins and EPS higher over time.