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

Group 1 - Boston Scientific Corporation (BSX) is currently viewed as a strong mid-cap growth stock, despite Oppenheimer lowering its price target from $125 to $100 while maintaining an Outperform rating [1] - The $14.5 billion acquisition of Penumbra is Boston Scientific's second-largest takeover and signifies its re-entry into the neurovascular market, aiming to enhance its cardiovascular and neurovascular portfolios [2][3] - Analysts are cautious about the valuation of the Penumbra deal, particularly the high purchase multiple of $374 per share, which may impact the company's return on invested capital (ROIC) [1][3] Group 2 - The integration of Penumbra is expected to improve Boston Scientific's revenue and margins in the long term, with projected sales of approximately $1.4 billion for FY 2025 [3][4] - The acquisition is anticipated to be dilutive to BSX's earnings per share (EPS) by $0.06-0.08 in the first full year post-acquisition, becoming neutral to modestly accretive in the second year, and increasingly accretive thereafter [4]