Is Boston Scientific Stock Too Dependent On Two Businesses?
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For a Boston Scientific (BSX) holder, the 5% fall in sales of its EP business from a year earlier in the third quarter of 2026 stands out as a worrying figure. Management singled out EP and WATCHMAN as the two businesses under pressure, and expects growth in the remaining 75% of the company to fall short of offsetting them in 2027. So why are both businesses under pressure?
Why Are Boston Scientific’s EP And WATCHMAN Sales Falling?
EP is losing ground to newer products. On its October 28, 2026 call, management said its strong market share position eroded as new technologies were introduced. The loss was concentrated in the U.S., where EP sales fell 8%, while international EP sales grew 2%. A two-week outage from a cyber incident sped up some of that share shift, but management expects its share to keep eroding until it launches FARAWAVE Ultra, now expected in early 2028.
WATCHMAN has a different problem: its market is shrinking. U.S. WATCHMAN sales fell 7% in the quarter, and management said the underlying market is declining by about 7% to 8%. Management believes the slowdown mainly reflects changes in how patients are identified and referred. It also expects a new competitive launch to add pressure in 2027.
Boston Scientific’s Growth Has Slowed For Four Quarters
The company’s revenue growth fell from 20.3% in the third quarter of 2025 to 1.4% in the third quarter of 2026, dropping lower in each quarter along the way. Management estimates the cyber incident took about 3 percentage points off that latest figure, yet growth was already slowing in the three quarters before it. Management calls 2027 the trough and aims to return to high performance in 2028, but that remains a forecast.
The near term looks weaker still. Management expects fourth-quarter 2026 revenue to decline by 1% to 3%. Excluding its pending acquisition of Penumbra, it says it will be challenged to grow sales and adjusted earnings per share in 2027. It also expects the drop in EP and WATCHMAN sales to show up in gross margin through a weaker product mix.
Not all of Boston Scientific is slowing. Its interventional cardiology business grew 19% in the third quarter of 2026. Management also expects a cost program to deliver more than $500 million of savings over the next three years.
How Much Of This Does Boston Scientific’s Price Assume?
The price likely assumes a good deal of the slowdown, after Boston Scientific stock lost 53.6% of its value in the year to November 4, 2026, while the S&P 500 returned 14.9%. It now trades at 19.0 times earnings, against 22.8 for the S&P 500. That lower multiple comes as its growth has slowed from a year ago. Both multiples use reported earnings for the past twelve months.
The shares have held up better than the market in broad sell-offs, falling less than the S&P 500 in each of five market shocks since 2022. In the 2022 inflation shock, they fell 18.0%, against 24.0% for the index. The past year’s fall was different because it occurred while the index rose.
A holder has reason for measured worry rather than alarm. Management said the sales pressure sits mainly with EP and WATCHMAN, and expects new products over the next three years to support stabilization in both. That worry would ease if the rest of the company grew fast enough to cover them before then, though management does not expect that in 2027. EP sales growth is the measure to watch when Boston Scientific next reports, expected in February 2027.
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