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On Thursday, Jefferies analyst reiterated a Buy rating for Globus Medical (NYSE:GMED), with a steady price target of $105.00, following the company’s announcement of its plans to acquire Nevro Corp . (NYSE:NVRO), a medical device company. The medical device giant, currently valued at $12 billion, boasts a "GREAT" financial health score according to InvestingPro analysis, with 14 key insights available to subscribers. The acquisition is valued at approximately $250 million in equity value, which equates to roughly 0.6 times sales.
Globus Medical expects the transaction to close in the second quarter of 2025. The company has projected an approximate 20 cents per share dilution in 2025, which translates to about a 6% impact. However, the company anticipates accretion in the second year following the acquisition.
The strategy outlined by Globus Medical includes maintaining the sales channel currently in place for Nevro, while also restructuring compensation and making significant cuts in other areas. This approach follows a previously successful integration with NuVasive (NASDAQ:NUVA), which bolsters confidence in Globus Medical’s ability to effectively merge with Nevro. The company’s impressive 102% revenue growth in the last twelve months demonstrates its execution capabilities. Despite this, the analyst noted that investors might remain skeptical of the shift in strategy.
Globus Medical’s decision to acquire Nevro represents a strategic move to expand its portfolio in the medical device sector. The company’s management has expressed confidence in the potential for cost synergies and the strengthening of its market position through this acquisition.
The analyst’s comments reflect a positive outlook on Globus Medical’s ability to execute the acquisition and integrate Nevro’s operations, despite potential initial skepticism from the market. The maintained Buy rating and price target suggest that Jefferies sees a favorable long-term outcome for Globus Medical’s stock as a result of this transaction.
In other recent news, Globus Medical Inc. has made a strategic move to acquire Nevro Corp for approximately $250 million, a decision that has sparked interest among several analyst firms. The acquisition is expected to enhance Globus Medical’s portfolio and strengthen its position in the neuromodulation and pain stimulation market. Analysts from BTIG view the acquisition as a low-risk investment and anticipate it to be accretive to Globus Medical’s operating profit by fiscal year 2026. Similarly, Stifel analysts maintain a Buy rating on Globus Medical, pointing out potential benefits from the acquisition, including diversification and cross-selling opportunities.
On the other hand, Canaccord Genuity maintained its Buy rating on Globus Medical and increased the price target to $101, following the company’s announcement of strong preliminary results for the fourth quarter of 2024. Truist Securities, while acknowledging the company’s strengths, maintained its Hold rating on Globus Medical, awaiting further evidence of significant revenue and EPS growth. These recent developments reflect the company’s growth trajectory and the anticipated benefits of the Nevro Corp acquisition.
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