Why Penumbra stock is up nearly 5% today

Veteran medical device manufacturer Penumbra (PEN 4.55%) I got some good news on Wednesday. One analyst initiated coverage of the company’s stock with a fairly bullish review, and investors took it to heart. Collectively, they drove Penumbra’s share price up nearly 5% in a day S&P 500 the index had a slow evolution, with a decrease of 0.3%.

Initiated with a buy recommendation

Immediately after market close on Tuesday, Stifel forecaster Mathew Blackman set the tone for Penumbra on Wednesday. He launched coverage of the specialty healthcare stock with a strong buy recommendation, setting a price target of $238 per share. This anticipates a pretty juicy upside potential for the stock of nearly 22%.

In his inaugural analysis of Penumbra, Blackman offered several justifications for his optimistic interpretation. On the product side, he singled out the mechanical thrombectomy segment, a specialty of the company, as an area particularly ripe for growth. He also feels the company is on solid ground; he wrote that “its already positive cash flow model, strong growth and margin profile are all significant points of differentiation.”

Finally, he is also encouraged by Penumbra’s “new product momentum” and its potential to tap into international markets.

Excellent time

With all these positive factors behind it, Penumbra is well positioned to experience sustained and significant growth in both sales and profitability, Blackman wrote. The company is arguably operating at a very opportune time, when the general US population is aging proportionately – and will have a greater need for healthcare and healthcare-related products.