Boston Scientific Corp

We exited Boston Scientific as the competitive environment evolved more quickly than anticipated. Growth in key franchises, Farapulse and Watchman, slowed due to competitive pressures and mixed clinical trial outcomes. While market share may stabilize over time, reduced visibility into a near-term reacceleration led us to reallocate capital toward higher-conviction opportunities.

Boston Scientific was mentioned in the context of the acquisition of Penumbra, but no specific investment thesis or directional argument was provided regarding its future performance or valuation.

We redeployed some of the proceeds into a new position in Boston Scientific, a medical devices company now trading at historically attractive valuations following concerns about slowing growth in its electrophysiology division. We believe investors are underappreciating its long-term growth potential and incumbent positioning in its core end markets. Boston Scientific has a durable core business supported by recurring procedure volumes, while newer growth drivers like Watchman and Farapulse provide upside as adoption expands. In our view, the market has underappreciated the sustainability of Boston Scientific’s growth and innovation pipeline, allowing us to invest in a resilient, well-managed business at a valuation that offers both downside support and long-term return potential.

Boston Scientific Corporation (BSX) reported disappointing quarterly results in early February, with its two key growth franchises missing expectations. Although BSX modestly beat top and bottom-line consensus estimates, management lowered its 2026 organic sales growth guidance to +10-11%. The company continues to dominate in electrophysiology, but overall market growth is decelerating, and competition may be impacting market share. Despite strong growth in the Watchman segment, results fell short of consensus estimates, and the durability of its growth trajectory remains a concern for investors. The timing and magnitude of Watchman's contribution may not be resolved soon, but the current valuation may have overly discounted BSX's long-term earnings growth potential.

Boston Scientific (BSX) dropped despite reporting solid operating results. The stock declined after initial 2026 guidance came in below expectations, driven by revenue growth deceleration in its electrophysiology segment. This segment has contributed substantially to revenue growth in the past, and the deceleration suggests that the company’s main competitor, Medtronic, may be gaining market share.

Boston Scientific Corporation is a global manufacturer of medical devices used in a broad range of interventional medical specialties. While the company continues to execute well, particularly with its Watchman device and pulsed field ablation (PFA) offerings, shares fell during the quarter amid rising competition in the attractive PFA space for treating arrhythmia. Despite this competitive backdrop, we believe Boston Scientific remains a strong compounder. Coupled with cost discipline and more than 50 basis points of annual operating margin expansion, we think the company’s double-digit earnings per share growth profile makes it a compelling name within the large-cap medical device universe.

We initiated a position in Boston Scientific, an innovative medical device maker with significant growth drivers. Boston Scientific’s first-mover advantage, robust clinical data and deep relationships with physicians allow it to maintain dominant market share and outgrow competitors, with additional growth drivers like Watchman and Farapulseto helping it expand rapidly in underpenetrated markets. Management, led by CEO Mike Mahoney, has transformed the company through disciplined R&D and M&A, driving organic sales growth and margin expansion. With consistent execution, expanding margins and global demand tailwinds, Boston Scientific is well positioned for durable growth.

Boston Scientific Corp. is well positioned to manage tariffs due to their diverse supply chain and increased US manufacturing footprint post COVID. The company has strong pricing power and has largely mitigated tariffs thus far. The market is seeing a rotation within healthcare, but Boston Scientific remains favored due to its diversified growth profile across various franchises. Their Farapulse technology is expected to drive significant growth, and management's new long-term targets of 10% organic revenue growth and double-digit EPS growth through 2028 suggest a positive outlook.

We initiated a position in Boston Scientific, which we believe offers an attractive combination of above-average earnings growth and durability in revenues. The company is part of our broader strategy to invest in differentiated health care businesses that can navigate through various market environments. Our conviction in Boston Scientific is supported by its strong fundamentals and the ongoing demand for innovative medical solutions, which we expect to contribute positively to our portfolio's long-term growth.

We initiated a position in Boston Scientific, a leading medical device company specializing in stroke prevention for patients with atrial fibrillation. The recent U.S. Food and Drug Administration’s approval of a breakthrough heart rhythm device, along with continued momentum in stroke reduction products, position Boston Scientific for potential accelerated growth.