Wells Fargo cuts ShockWave Medical to Equal Weight, sees growth runway priced in

As previously reported, Wells Fargo analyst Larry Biegelsen downgraded ShockWave Medical to Equal Weight from Overweight with a price target of $235, down from $300, reflecting his view that there is significant runway for growth but this is priced into the stock. The analyst estimates that the current market price implies revenue growth at a 14.3% CAGR 2022-2040 and does not fully reflect the risk of new competitive IVL systems. Biegelsen believes that this valuation leaves little room for error, particularly as ShockWave is shifting its coronary strategy to account penetration versus new accounts. He also thinks that the expiration of incremental coronary reimbursement such as the new technology add-on payment in 10/23 and transitional pass through payment in 2024, increases uncertainty for ShockWave if IVL is not placed into a higher-priced CPT code.