What Happened?
Shares of medical device company Boston Scientific (NYSE:BSX) fell 4.6% in the afternoon session after the company agreed to acquire Penumbra in a transaction valued at approximately $14.5 billion, marking its largest deal in two decades.
The acquisition, a mix of cash and stock, aimed to expand Boston Scientific's portfolio of cardiovascular devices, particularly in high-growth vascular and neurovascular markets. However, the market reacted negatively to the news. To finance the roughly $11 billion cash portion of the deal, the company planned to use a combination of cash on hand and new debt. Boston Scientific also stated that the acquisition was expected to be dilutive, or reduce, its adjusted earnings per share in the first full year after the deal's closing.
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What Is The Market Telling Us
Boston Scientific’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock gained 8.5% on the news that the company reported first quarter 2025 results that beat analysts' sales and EPS expectations. Organic sales growth topped the company's own forecast and was led by a 25.6% surge in its Cardiovascular segment, a signal that demand in its largest business is accelerating. Looking ahead, its revenue guidance for next quarter exceeded Wall Street's estimates. Overall, we think this was a decent quarter with some key metrics above expectations.
Boston Scientific is down 4.9% since the beginning of the year, and at $90.08 per share, it is trading 16.7% below its 52-week high of $108.14 from September 2025. Investors who bought $1,000 worth of Boston Scientific’s shares 5 years ago would now be looking at an investment worth $2,480.
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