Roman Didkivski
Following a ~10% rally in the previous session amid reports that Johnson & Johnson (New York Stock Exchange:JNJ) was in talks to acquire it, cardiac device maker Shockwave Medical (NASDAQ:SWAV) extended its gains on Wednesday, as analysts argued that a potential The agreement would make strategic sense.
An agreement could materialize in a few weeks, The Wall Street Journal reported late Tuesday, citing people familiar with the matter.
The document did not rule out another company emerging as a bidder for SWAV, a developer of intravascular lithotripsy (IVL) devices to treat cardiovascular diseases.
“We view SWAV as potentially a good strategic fit, albeit at a relatively high valuation,” J&J Wells Fargo analysts led by Larry Biegelsen wrote, leaving their Equal Weight rating and $210 per share target unchanged.
While previous reports implicated Boston Scientific (BSX) and Penumbra (PEN) as potential bidders for SWAV, “JNJ's deep pockets and implied valuation” mean a bidding war is unlikely, the analysts added.
Meanwhile, Bank of America argued that Shockwave Medical (SWAV) will be a strategic choice for J&J as the healthcare giant expands its interventional cardiology business following its recent cardiology-related acquisitions, Abiomed and Laminar.
However, the company removed its rating and price target from SWAV, noting that the stock is no longer trading on fundamentals following news of the J&J deal.
