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Bank of America reaffirmed its buy rating on ShockWave Medical (NASDAQ:SWAV) after the medical device maker witnessed a sharp premarket sell-off on Tuesday in reaction to a deal to acquire Neovasc (NASDAQ:NVCN), a company focused on angina treatments.
In a note to investors on Wednesday, analyst Travis Steed said ShockWave (SWAV) shares were sold as investors scrutinized the company’s purchase agreement and results early in the fourth quarter of 2022 that fell short of consensus. , especially for US coronary admissions.
“We do not consider Neovasc to be a sign that SWAV is concerned about its prospect of central growth from intravascular lithotripsy (IVL),” Steed wrote.
Given the $100 million initial cash required, the analyst argues that the addition of Neovasc (NVCN) “is not a huge risk for SWAV” but “has the potential to be a great growth driver” as the company has margins and cash flow to assume the clinical risk.
Following the recent sell-off, ShockWave (SWAV) offers an attractive buying opportunity, the analyst noted, despite cutting his price target to $265 from $320 to reflect lower clearing multiples.
With a Buy rating on ShockWave (SWAV), Seeking Alpha contributor Yannick Frey argues that the company has a best-in-class method for breaking down calcium in arteries that even outperforms traditional methods.
