Analysts say they no longer have a handle on the recovery path for a stock already down more than half this year.
Citigroup downgraded Boston Scientific to neutral from buy and lowered its price target to $50 from $57 per share. The firm cited increased competition and slower-than-expected growth in the company's core markets, noting it has lowered its own estimates on the medical device maker eight times so far this year.
Citigroup also pointed to lingering effects from a cybersecurity breach in August, which the firm said has left the company scrambling to fulfill customer orders as quickly as possible. While Citigroup's analysts said they believe management can work through the challenges, they wrote that they "don't have a handle on the recovery path" and prefer to "step aside" on the stock for now. Shares of Boston Scientific are down 53 percent so far this year.
Repeated estimate cuts are the more telling detail
A single earnings miss can reflect a one-time issue. Eight separate downward revisions within a calendar year suggests a firm that keeps discovering the problem is larger than it first appeared, which is a harder pattern for a stock to shake even once the immediate operational issues are resolved.
What to watch
Whether the company's next earnings report shows order backlogs normalizing following the August breach will be the clearest test of whether the operational disruption is temporary or has done lasting damage to customer relationships.