Johnson & Johnson will purchase Shockwave Medical for $12.5 billion
Shockwave Medical Inc (NASDAQ:SWAV) is in the spotlight today, after blue-chip pharmaceutical giant Johnson & Johnson (JNJ) announced it would buy the company for $13.1 billion, boosting its portfolio of cardiovascular disease treatment devices. SWAV was last seen up 1.8% at $325.77 after the news, while JNJ is down 0.07% at $152.38.
SWAV received a pair of bear notes in response. Needham downgraded the stock to "hold" from "buy," while Piper Sandler slashed its rating to "neutral" from "overweight." Of the 12 analysts in coverage, eight now carry a "hold" or worse rating, with four a "buy" or better.
It's natural that analysts would be hesitant to expect more upside for Shockwave Medical stock, as it's already up 70.8% in 2024. The 20-day moving average helped guide the stock higher this year, and it's remained near its March 28 record high of $331.58, with potential support arising at the $320 level.
SWAV's typically quiet options pits have already seen 4.2 times the average daily options volume today. The May 340 call is the most popular, where new positions are being opened. These traders are in luck, as the equity is seeing attractively priced premium at the moment, per its Schaeffer's Volatility Index (SVI) of 42%, which ranks in the low 18th percentile of its annual range.