Oppenheimer Questions Valuation of Boston Scientific's $14.5 Billion Penumbra Deal

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. The integration is projected to enhance Boston Scientific’s revenue and margins over the long term.

According to the company's release, Penumbra is expected to report ~$1.4 billion in sales for FY 2025. After the deal is completed later in 2026, it is expected to be dilutive to BSX's EPS by $0.06-0.08 in the first full year, turn neutral to modestly accretive in year two, and become more accretive thereafter.

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.