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On Friday, Piper Sandler analyst Adam Maeder upgraded shares of Nevro Corp (NYSE:NVRO), a medical device company with a market capitalization of $214 million, to Neutral from Underweight and adjusted the price target to $5.85 from $6.00. The revision followed the announcement that Nevro has entered into a definitive agreement to be acquired by Globus Medical Inc. (NYSE:GMED) for $5.85 per share in cash.
The acquisition news, released on Monday, February 6, 2025, prompted the adjustment in Nevro’s stock rating and price target. The announcement has already driven significant market reaction, with InvestingPro data showing a 12.8% return over the past week. Maeder indicated that the new price target aligns with the acquisition price, which is deemed to be the final offer. He expressed the opinion that it is unlikely for another bidder to propose a higher offer for Nevro.
Nevro’s agreement with Globus Medical marks a significant transition for the company. The cash offer of $5.85 per share represents a tangible outcome for Nevro’s shareholders, and Piper Sandler’s update to the stock’s rating reflects this expected conclusion of the acquisition process. According to InvestingPro, Nevro maintains a strong liquidity position with a current ratio of 5.02, indicating solid financial stability as it approaches this transaction. Get access to 8 more key ProTips and comprehensive analysis with an InvestingPro subscription.
The analyst’s commentary suggests a settled view that the acquisition price is a fair valuation for Nevro, leading to the price target being set precisely at the acquisition offer. The upgrade to a Neutral rating indicates a shift from a previously bearish stance on the stock’s valuation.
With the acquisition pending, Nevro’s stock is now expected to trade around the proposed takeover price until the transaction is finalized. Shareholders and investors will be monitoring the progress of the acquisition closely as it undergoes the necessary regulatory and shareholder approvals. For deeper insights into Nevro’s financial health and detailed analysis, access the comprehensive Pro Research Report available exclusively on InvestingPro, covering this and 1,400+ other US stocks.
In other recent news, Nevro Corp reported a decline in Q4 revenue alongside an increase in cash reserves. The company’s Q4 worldwide revenue fell by 9% to 10% from the previous year, while the cash, cash equivalents, and short-term investments rose by approximately $15.5 million. Nevro is currently exploring strategic options to diversify its product portfolio and accelerate growth.
In analyst notes, Mizuho (NYSE:MFG) Securities lowered its price target for Nevro but maintained a neutral rating, citing potential in the painful diabetic neuropathy (PDN) market. Morgan Stanley (NYSE:MS), however, downgraded Nevro’s stock from Equalweight to Underweight and reduced its price target due to challenges faced by the company, particularly within its Spinal Cord Stimulation (SCS) business.
Piper Sandler also reduced its price target for Nevro, despite acknowledging the company’s third-quarter earnings that surpassed consensus expectations. The firm maintained an Underweight rating on the stock, expressing concerns about the company’s growth trajectory. These recent developments underline the challenges and opportunities facing Nevro in the current market landscape.
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