Canaccord ups Nevro PT to $62 from $46


Canaccord Genuity raised its price target for Nevro (NYSE:NVRO) to $62 from $46 after the medical device maker appointed Keith Grossman as president and CEO, effective immediately. The stock closed at $44.77 on March 19.

“We recommend adding to/building positions in Nevro on the … announcement,” writes analyst Jason Mills, who also reduced his discount rate on Nevro to 10% from 20%, among other things.

Citing Mr. Grossman’s stints in the executive suites of Thoratec and Conceptus, Mr. Mills said Mr. Grossman’s team turned around those companies, drove acceleration in revenue growth trends, and consummated lucrative sales to St. Jude Medical and Bayer, respectively.

Mr. Mills said he has known Mr. Grossman for nearly 20 years, and “can say without reservation that he has proven to be one of the best CEO executors in med-tech.”

He said Nevro – from the perspectives of “total addressable market/under-penetration, unique technology, strong clinical evidence track record and discipline, [and] solid gross margins - reminds of Thoratec and Conceptus very much. Add to positions,” he said.

Mr. Grossman, who has more than 30 years of experience in the sector, succeeds Rami Elghandour, who stepped down as president, CEO and a director of the company. Nevro also appointed two new independent directors, Elizabeth Weatherman and Kevin O'Boyle, effective immediately, and accepted the resignation of Ali Behbahani as a director.

The leadership appointments follow a constructive engagement with Broadfin Capital, a significant Nevro shareholder.

"We are pleased to have worked constructively with the board to reach an agreement that enhances the company's leadership team and further positions the company for future success,” Kevin Kotler, managing member of Broadfin, said in a statement.

“We applaud the board's willingness to engage with its stockholders and we look forward to continuing to work with the board and management team to enhance value for all of the company's stockholders," he added.

Stephen Kilmer