ShockWave Medical Downgraded by Piper Sandler Amid J&J Acquisition

Piper Sandler Adjusts Rating on ShockWave Medical

On April 5, 2024, Piper Sandler adjusted its rating on ShockWave Medical (SWAV) to Neutral from its previous Overweight grade, marking a downgrade. This change was announced with the stock priced at approximately $325.54. For more details on this rating adjustment, you can visit the report by TheFly through the provided link. This downgrade came amidst news that Johnson & Johnson (JNJ) plans to acquire Shockwave Medical for a whopping $13.1 billion, a move aimed at expanding its MedTech cardiovascular portfolio. The acquisition, reported by the Wall Street Journal on the same day, is a strategic effort by Johnson & Johnson to enhance its medical device sector offerings, particularly in the area of cardiovascular interventions. Shockwave Medical, known for its innovative Intravascular Lithotripsy technology, has been a key player in the medical device industry, making it an attractive acquisition target for Johnson & Johnson. Despite the significant acquisition, the impact on Shockwave Medical's stock was modest, with SWAV stock set to open at approximately $325 per share, marking a slight increase of 1.6% from its close on April 4. Meanwhile, Johnson & Johnson's stock price remained nearly unchanged at $153. The muted market reaction can be attributed to a prior surge in Shockwave's stock price, which jumped $30 per share in late March following reports by The Wall Street Journal about ongoing discussions between the two companies. Additionally, Shockwave Medical had projected its 2024 revenue to be between $910 million and $930 million, indicating a 27% increase from 2023. This acquisition is part of Johnson & Johnson's strategy to expand its portfolio of heart treatment devices. The company's last major acquisition was in November 2022, when it purchased Abiomed for $16.6 billion, a company known for its heart pump technology. Johnson & Johnson has announced its plan to acquire Shockwave Medical for $13.1 billion, translating to $335 per share. This significant move comes as Shockwave Medical's stock has experienced a notable surge in 2024, partly fueled by speculation of a takeover. As of April 4, 2024, Shockwave's stock had risen by 68% to $319.99, while Johnson & Johnson's stock saw a slight decline of 2.7%. Shockwave Medical, recognized for its pioneering work in intravascular lithotripsy—a technique used to break down hardened calcium in the walls of blood vessels—has caught the attention of Johnson & Johnson. The acquisition is seen as a strategic move by Johnson & Johnson to strengthen its position in the cardiovascular intervention sector and to expedite its transition into markets with higher growth potential.