Penumbra (PEN) PT Raised to $241 at Deutsche Bank
Deutsche Bank analyst Pito Chickering raised the price target on Penumbra (NYSE: PEN) to $241.00 (from $205.00) while maintaining a Buy rating.
The analyst comments "3Q revenues of $301mm came in comfortably ahead of the Street’s $297mm, equating to +11% yr/yr growth with the beat driven by upside in Thrombectomy and Embolization/Access more or less in line. Most importantly, 3Q growth in the allimportant US VTE category was a robust +32% and (coupled with NARI’s solid print earlier this week) reflective of strong market growth – buoyed by further share gains for Penumbra in 3Q as LF 2.0 continues to be well-received. Regarding the P&L, 3Q profitability trends were also encouraging with gross and operating margins both bettering Street models – reflective of both favorable product/geographic mix and operational improvements. Based on the revenue and margin upside, EPS of 85c came in well ahead of consensus at 69c. Our constructive thesis on PEN shares remains centered around a bullish outlook for the US VTE thrombectomy market broadly – with results from both PEN and NARI clearly evidencing that MT category growth remains quite robust with market growth north of 20% in 3Q. Coming out this week’s TCT, where we’ve had the chance to listen to new data presentations and engage with ICs performing PE interventions, the meeting has strengthened our conviction around the strong market growth outlook for VTE interventions – and MT in particular – over the next several years. Big picture, positive data from NARI’s PEERLESS I trial – the first-ever head-to-head RCT of two different endovascular interventions (MT vs CDT) – should further accelerate conversion from lytic-based to lytic-free catheter procedures; doc feedback points to the data ultimately benefiting the entire MT category, though NARI’S FlowTriever may see a somewhat disproportionate benefit nearer term. But that said, Penumbra’s CAVT technology continues to be well-received (as evidenced by further share capture in 3Q) and a subgroup analysis of interim data from the STRIKE-PE trial for patients undergoing LF intervention struck us as quite positive specifically relative to low rates of blood loss and additional efficiency gains with LF versus CAT12 (which itself also showed low bleeding rates in the full 300pt cohort). Structurally, we are also seeing more centers pursuing buildout of a PERT team, which lends further confidence around the durability of market growth over the next several years."