J&J, Stryker among potential suitors for Nevro: Wolfe

Following an over 44% drop in the previous session, driven by its mixed Q2 print, pain therapy developer Nevro Corp. (NYSE:NVRO) bounced back as Wolfe Research upgraded the MedTech, citing J&J (NYSE:JNJ) and Stryker (NYSE:SYK) as potential suitors for the company.

“NVRO has long been speculated as a takeout,” Wolfe analyst Mike Polark argued, noting the company’s ongoing review to evaluate possible strategic options.

The analyst added that following the selloff, the stock’s price/ valuation has significantly declined since the buyout rumors started to spread.

Polark ruled out Abbott Laboratories (ABT), Boston Scientific (BSX), and Medtronic (MDT) from the buyout mix, noting those industry heavyweights as direct competitors. That “leaves two other ‘often rans’ like JNJ and SYK,” the analyst added.

According to Polark, their smaller rivals, Globus Medical (GMED) and Alphatec Holdings (ATEC), which, similar to NVRO, focus on spine-related products, could be in the mix. Wolfe upgraded Nevro (NVRO) to Peer Perform from Underperform but removed its $14 price target.