On Wednesday, BofA Securities updated its outlook on Shockwave Medical (NASDAQ:SWAV), increasing the price target to $310 from the previous $275, while reiterating a Buy rating on the company's stock.
The adjustment reflects the firm's confidence in Shockwave Medical's expanded market potential following the introduction of the JAVELIN catheter, which is designed for treating patients with moderate to severely calcified peripheral artery disease (PAD).
The JAVELIN catheter is specifically developed to address challenging lesions located in native, de novo superficial femoral, popliteal, or infrapopliteal arteries. Shockwave Medical currently estimates its S4 product can treat approximately 30% of the shorter lesions below the knee. However, with the addition of the E8, targeting longer lesions, and Javelin, designed for difficult-to-cross cases, the company believes it can triple its addressable market opportunity in this segment.
The new Javelin Peripheral catheter features an emitter placed at the front end to enhance sonic output at the catheter's tip, aiding in crossing tough lesions. It also boasts a high-performance hydrophilic-coated design, which enables navigation through tortuous anatomy and provides the necessary push-ability for below-the-knee applications.
The price target hike to $310 is also influenced by rising peer multiples in the market. BofA Securities has based the new price objective on a 36x multiple of Shockwave Medical's estimated 2025 EBITDA, an increase from the prior 32x multiple.
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