Four banks initiate coverage with 'buy' call on Shoulder Innovations; shares soar
Shares of Shoulder Innovations, a small-cap maker of shoulder implants, surged more than 18% yesterday, August 25, after at least four Wall Street analysts initiated coverage with bullish calls. Goldman Sachs, for example, set a target price that implies upside of more than a third.
Details
Shares of Shoulder Innovations surged 18.2% yesterday to $15.02 per share, their highest closing level since July 31, the stock’s first trading day after its IPO. In early trading today, the gains were extended more than 1% before momentum eased and the stock slipped slightly into the red as of this writing.
At least four Wall Street firms – Goldman Sachs, Jefferies, Morgan Stanley, and Piper Sandler – initiated coverage on the company with bullish recommendations, CNBC reported. All four banks were part of the company’s IPO syndicate. Goldman Sachs and Jefferies issued "buy" ratings, while Piper Sandler and Morgan Stanley rated the stock "overweight."
Goldman Sachs set a target price of $20 per share, 33% above the current level (and a 57% premium at the time the note was published). Jefferies projected $19 per share, 26.5% upside from the last close. Morgan Stanley and Piper Sandler each set their target price at $18 per share.
What analysts like
Shoulder Innovations, a medical device maker focused on shoulder surgery, went public in late July at $15 per share. By Friday, August 22, the last trading day before the Wall Street recommendations were released, the stock had already fallen more than 15%.
Goldman analyst David Roman expects Shoulder Innovations stock to appreciate as there is an expanding market for shoulder implants, CNBC writes. “When considering the revenue growth trajectory, attractive end-market, and [small- and mid-cap] MedTech comps, we see meaningful upside to current valuation," Roman is quoted as saying.
He believes the proceeds from its IPO could “provide sufficient runway for Shoulder Innovations to reach profitability" through sales force and commercial organization expansion, as well as the launch of pipeline products that fill gaps in the portfolio.
In 2024 (no later figures are available), the company's revenue grew 64% to $31.6 million and net loss grew 23% to $15.6 million, the IPO prospectus said.
The AI translation of this story was reviewed by a human editor.
