Oppenheimer Questions $14.5B Penumbra Deal Valuation Despite Boston Scientific's (BSX) Mew Market Dominance

Boston Scientific Corporation (NYSE:BSX) is one of the best mid-cap growth stocks to buy right now. On January 16, Oppenheimer lowered its price target on Boston Scientific to $100 from $125 with an Outperform rating. Oppenheimer is cautious on the financial optics of Boston Scientific’s $14.5 billion acquisition of Penumbra. Although the deal creates a powerhouse in the thrombectomy and neurovascular markets, analysts are questioning the valuation. At $374 per share, the high purchase multiple may hinder the company’s ability to generate a strong ROIC, leading the firm to question whether the timing was ideal for such a large-scale transaction.

Penumbra’s acquisition represents Boston Scientific’s second-largest takeover in its history and marks its re-entry into the neurovascular market.

The move is designed to broaden Boston Scientific’s cardiovascular and neurovascular portfolios. Having divested its neurovascular business to Stryker over a decade ago, Boston Scientific CEO Mike Mahoney emphasized that the company sought a scaled platform and a strong pipeline to return to this attractive segment. Penumbra is expected to contribute ~$1.4 billion in sales for 2025, and the integration is projected to enhance Boston Scientific’s revenue and margins over the long term.

Boston Scientific Corporation (NYSE:BSX) develops, manufactures, and markets medical devices for use in various interventional medical specialties. It has two segments: MedSurg and Cardiovascular.

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Disclosure: None. This article is originally published at Insider Monkey.