WF downgrades Bausch + Lomb on enVista recall giving a near-term uncertainty

Investing.com -- Wells Fargo downgraded Bausch + Lomb Corp to Equal Weight from Overweight on uncertainty from the voluntary recall of its enVista intraocular lenses (IOLs), which is expected to weigh on sales growth, earnings, and investor sentiment.

Brokerage cut its price target to $15 from $24, based on 9.5x its 2026 EBITDA estimate of $1.0 billion.

Bausch + Lomb announced a recall of its enVista IOLs, including Aspire, Envy, and certain lots of monofocal lenses, due to reports of toxic anterior segment syndrome.

Wells Fargo (NYSE:WFC) highlighted that enVista was a key growth driver for BLCO and its main entry into the high-growth premium IOL segment.

The firm estimates a 1-2% sales impact, translating to a revenue loss of about $68 million in 2025 and $78 million in 2026. EPS is expected to take a hit of $0.10 (15%) in 2025 and $0.11 (11%) in 2026.

“Our check suggests that enVista products should return to market but could lose share,” Wells Fargo said, adding that it assumes BLCO will recapture about 60% of lost sales upon relaunch.

Wells Fargo noted that while enVista is expected to return to the market, the timing remains uncertain.

The firm believes the recall may cast a shadow over the enVista brand, potentially leading to lower market penetration upon its relaunch.

BLCO had previously planned to launch enVista Aspire in Canada in 2025, enVista Envy in the EU in 2025, and enVista Beyond in the U.S. in 2026.

While BLCO’s improving financial performance and the successful Miebo launch had boosted investor sentiment, Wells Fargo said ongoing uncertainty around Bausch Health’s (BHC) ownership and separation, along with the enVista recall, complicates the company’s outlook.

“enVista uncertainty adds to overhang,” the firm said, adding that the lack of visibility on the recall’s impact and timeline will likely keep BLCO shares range-bound.

Wells Fargo expects further updates during BLCO’s Q1 earnings call on April 30.