Are You Still Holding Boston Scientific Stock For Its Next Device

Its capital budget has overtaken its research budget for the first time in the fifteen years on record, and two of the seven launches management is counting on to restore growth come from outside its own labs.

A holder of Boston Scientific (BSX) has watched the stock fall 53.4% over the past twelve months. What matters from here is where the money goes. Over the last twelve months more of it went into capacity than into research, and the growth management points to for 2028 comes partly from outside its own labs.

The Two Budgets Swapped Places After 59 Quarters

Over the last twelve months the company spent $2.7 billion on capital expenditures and $2.2 billion on research and development, against $21 billion of revenue. Research had led that pair for 59 consecutive quarters, and this is the first structural flip in the fifteen years on record. Inventing has not stopped, and research still absorbs 10.3% of revenue. The question is whether the bigger budget is aimed at what actually slowed.

Capacity Is Not What Ails Electrophysiology Or WATCHMAN

Organic revenue grew 7% in the second quarter of 2026, the top of its 5% to 7% guide; the problem is the forecast. For the second half of 2026 management expects global Electrophysiology to run approximately flat and global WATCHMAN to decline by mid- to high-single digits, while the roughly 75% of revenue outside those two grows about 6%. In electrophysiology the problem is competitive, not physical: the company concedes it undercalled U.S. competitive pressure and says that, while it remained the PFA leader with FARAPULSE, its own share has come down, and that U.S. PFA revenue at about 80% of the AFib market now limits its ability to offset that. It attributes the WATCHMAN decline primarily to clinical evidence published over the last nine months that changed referral patterns. Its answer in electrophysiology is a next-generation ablation catheter and an entry into the ICE market in 2027, with a further catheter launch in 2028.

Two Of The Seven Launches Behind 2028 Come From Outside The Labs

Management's case for strong adjusted EPS growth in 2028 rests on seven launches it says address a market opportunity that exceeds about $25 billion. Two of them are Penumbra, whose close is expected in the second half of 2026, and MiRus, where a $1.5 billion investment came with an option over its TAVR business. The other bridge is cost: management expects to realize over half of its targeted $500 million in run-rate savings exiting 2027 to drive 2028 margin expansion, with the full program realized exiting 2029. The business still generates cash: about $3.8 billion of free cash flow is expected in 2026. Cash generation like that is one of the things the Trefis High Quality Portfolio looks for in its holdings.

Watch The Base Business Before The Deals

The stock is 71.6 percentage points behind the market over the past twelve months, so the slowdown itself is not the open question. What is open is whether capital and acquisitions compound the way the device cycle did. The read at the third quarter of 2026 is not the 3% to 5% headline guide but whether the base business outside electrophysiology and WATCHMAN holds the roughly 6% guided for the second half. If it does not, the purchased platforms carry more than the plan assumes. Owning it from here means underwriting a rebuild through capital and deals rather than through the next device, and what to track is whether its guidance stops moving down.

Purchased Growth Carries Execution Risk You Do Not Control

Closing an acquisition, integrating it and landing a cost program are three ways a plan can slip, and a holder of one stock absorbs all three. A rules-based group of quality businesses spreads that exposure, which is the job the Trefis High Quality Portfolio is built for. That portfolio has a track record of outpacing the three major indices - the S&P 500, S&P Mid-cap, and Russell 2000.