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Morgan Stanley upgrades Shockwave to overweight, cites CMS reimbursement

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Human heart anatomy. 3d illustration

Mohammed Haneefa Nizamudeen

Shockwave Medical (NASDAQ:SWAV) has been upgraded by Morgan Stanley to overweight, with analysts expecting that the US Centers for Medicare and Medicaid Services will soon propose better reimbursement for the company’s coronary IVL catheters, which should help drive growth.

Morgan Stanley said that it expects improved CMS reimbursement to drive “potential acceleration in penetration” and “upside to street expectations.” The investment bank added that its 2024 EBITDA estimates were approximately15% higher than street estimates.

“Despite there being clear history of faster adoption on better surgery economics, consensus actually has a sequential slowdown in coronary IVL penetration in 2024,” said the bank, “which we don’t think makes sense.”

Morgan Stanley added that it doesn’t expect the product to face much near-term competition as Abbott is not expected to come out with an IVL solution until 2026 “at the earliest.”

The bank set a new price target for the stock of $335.

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