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Is it Apt to Hold Edwards Lifesciences Stock in Your Portfolio Now?
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Edwards Lifesciences (EW - Free Report) , following the sell-off of the Critical Care wing, looks forward to developing the most comprehensive structural heart portfolio. In TMTT, the robust adoption of the differentiated PASCAL technology is highly promising. The company is also advancing toward long-term growth through several initiatives across its businesses. Meanwhile, adverse macroeconomic impacts and currency fluctuations remain a concern for Edwards.
In the past year, this Zacks Rank #3 (Hold) stock has dropped 1.6% against the industry’s 9.6% rise and the S&P 500 composite’s 30.5% growth.
The renowned global medical device company has a market capitalization of $43.53 billion. EW’s earnings surpassed estimates in one of the trailing four quarters and matched on three occasions, the average surprise of 0.78%.
Let’s delve deeper.
Upsides for EW
Critical Care Divestment Fuels Structural Heart Opportunities: On Sept. 3, 2024, Edwards Lifesciences completed the sale of its Critical Care product group to Becton, Dickinson and Company for $4.2 billion in an all-cash transaction. Edwards expects this sell-off to enhance the company’s balance sheet flexibility for disciplined investments in technologies for aortic, mitral, tricuspid and pulmonic patients and new therapeutic areas for interventional heart failure. The company’s underlying rationale for separating Critical Care aligns with its vision to develop the most comprehensive structural heart disease portfolio.
Through its differentiated innovations, Edwards aims to address large unmet patient needs while extending its global leadership, delivering sustainable growth and increasing shareholder value.
Image Source: Zacks Investment Research
TMTT Portfolio Holds Potential: Backed by the insights gained from clinical trials and real-world experiences, Edwards Lifesciences constructed a strategic portfolio of leading transcatheter technologies to provide repair and replacement solutions for mitral and tricuspid patients.In the third quarter of 2024, the segment achieved a 73% increase versus the prior year. The adoption of differentiated PASCAL technology is expanding in both new and existing sites worldwide. Globally, mitral procedures are experiencing double-digit growth and even stronger growth in tricuspid therapy.
The company is making strides with the EVOQUE commercial rollout, successfully activating new sites in the United States and Europe (other than initial trial centers). During the third quarter, the company achieved approval in the United States for a fourth and larger size EVOQUE valve — 56 millimeters. Also, EVOQUE became eligible for Medicare's new technology add-on payment in October.
Long-Term Growth Strategy Buoys Optimism: Edwards Lifesciences expects to maintain its leadership position in the global TAVR market by developing next-generation valve platforms and maintaining trusted relationships with clinicians, payers and regulators. The company is leading several global initiatives, including reaching more patients through patient awareness, activation and access and enhancing physician training and support programs.
For TMTT, key initiatives undertaken for long-term growth include broadening the launch of PASCAL, advancing the introduction of EVOQUE in the United States and Europe and launching SAPIEN M3 in Europe next year. Moreover, the company plans to enter new therapeutic areas, such as aortic regurgitation (AR) and implantable heart failure management (IHFM). Having completed enrollments in the United States and Canada a year ahead of the plan, the MOMENTIS clinical study will continue to open new sites in Europe and Latin America, with global enrollment continuing into 2025.
Concerns for Edwards
Macro Concerns Put Pressure on the Bottom Line: The global economy continues to experience volatility and disruptions, including inflation and factors influencing overall economic stability and the political environment relating to health care. Any significant increases in the cost of raw materials, led by inflationary pressure, supply constraints stemming from geopolitical complications, regulatory changes or otherwise, could weigh heavily on the company’s operating results. Post the pandemic, the business is currently experiencing staffing shortages within the hospital systems.
Foreign Exchange Headwinds: Foreign exchange is a major headwind for Edwards Lifesciences due to a considerable percentage of its revenues coming from outside the United States. We remain worried about the significant challenges Edward Lifesciences had to face owing to the unfavorable foreign currency impact that has adversely affected the company’s gross margin over the past few quarters.
EW Stock Estimate Trends
The Zacks Consensus Estimate for Edwards Lifesciences’ 2024 earnings per share (EPS) has fallen 2 cents to $2.56 in the past 30 days.
The Zacks Consensus Estimate for the company’s 2024 revenues is pegged at $5.82 billion, down 3.1% from the year-ago reported number.
Haemonetics has an earnings yield of 5.41% compared with the industry’s 1.75%. Haemonetics’ earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed on one occasion, the average surprise being 2.82%. Its shares have risen 8.9% compared with the industry’s 21.2% growth in the past year.
Boston Scientific, carrying a Zacks Rank #2 at present, has a long-term estimated earnings growth rate of 13.8%. Shares of the company have surged 63.4% compared with the industry’s 23.1% growth. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.29%.
Penumbra, carrying a Zacks Rank #2 at present, has an estimated earnings growth rate of 35.3% for 2024 compared with the industry’s 12.8%. Shares of Penumbra have risen 7.8% compared with the industry’s 15.1% growth over the past year. PEN’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 10.54%.
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Is it Apt to Hold Edwards Lifesciences Stock in Your Portfolio Now?
Edwards Lifesciences (EW - Free Report) , following the sell-off of the Critical Care wing, looks forward to developing the most comprehensive structural heart portfolio. In TMTT, the robust adoption of the differentiated PASCAL technology is highly promising. The company is also advancing toward long-term growth through several initiatives across its businesses. Meanwhile, adverse macroeconomic impacts and currency fluctuations remain a concern for Edwards.
In the past year, this Zacks Rank #3 (Hold) stock has dropped 1.6% against the industry’s 9.6% rise and the S&P 500 composite’s 30.5% growth.
The renowned global medical device company has a market capitalization of $43.53 billion. EW’s earnings surpassed estimates in one of the trailing four quarters and matched on three occasions, the average surprise of 0.78%.
Let’s delve deeper.
Upsides for EW
Critical Care Divestment Fuels Structural Heart Opportunities: On Sept. 3, 2024, Edwards Lifesciences completed the sale of its Critical Care product group to Becton, Dickinson and Company for $4.2 billion in an all-cash transaction. Edwards expects this sell-off to enhance the company’s balance sheet flexibility for disciplined investments in technologies for aortic, mitral, tricuspid and pulmonic patients and new therapeutic areas for interventional heart failure. The company’s underlying rationale for separating Critical Care aligns with its vision to develop the most comprehensive structural heart disease portfolio.
Through its differentiated innovations, Edwards aims to address large unmet patient needs while extending its global leadership, delivering sustainable growth and increasing shareholder value.
Image Source: Zacks Investment Research
TMTT Portfolio Holds Potential: Backed by the insights gained from clinical trials and real-world experiences, Edwards Lifesciences constructed a strategic portfolio of leading transcatheter technologies to provide repair and replacement solutions for mitral and tricuspid patients.In the third quarter of 2024, the segment achieved a 73% increase versus the prior year. The adoption of differentiated PASCAL technology is expanding in both new and existing sites worldwide. Globally, mitral procedures are experiencing double-digit growth and even stronger growth in tricuspid therapy.
The company is making strides with the EVOQUE commercial rollout, successfully activating new sites in the United States and Europe (other than initial trial centers). During the third quarter, the company achieved approval in the United States for a fourth and larger size EVOQUE valve — 56 millimeters. Also, EVOQUE became eligible for Medicare's new technology add-on payment in October.
Long-Term Growth Strategy Buoys Optimism: Edwards Lifesciences expects to maintain its leadership position in the global TAVR market by developing next-generation valve platforms and maintaining trusted relationships with clinicians, payers and regulators. The company is leading several global initiatives, including reaching more patients through patient awareness, activation and access and enhancing physician training and support programs.
For TMTT, key initiatives undertaken for long-term growth include broadening the launch of PASCAL, advancing the introduction of EVOQUE in the United States and Europe and launching SAPIEN M3 in Europe next year. Moreover, the company plans to enter new therapeutic areas, such as aortic regurgitation (AR) and implantable heart failure management (IHFM). Having completed enrollments in the United States and Canada a year ahead of the plan, the MOMENTIS clinical study will continue to open new sites in Europe and Latin America, with global enrollment continuing into 2025.
Concerns for Edwards
Macro Concerns Put Pressure on the Bottom Line: The global economy continues to experience volatility and disruptions, including inflation and factors influencing overall economic stability and the political environment relating to health care. Any significant increases in the cost of raw materials, led by inflationary pressure, supply constraints stemming from geopolitical complications, regulatory changes or otherwise, could weigh heavily on the company’s operating results. Post the pandemic, the business is currently experiencing staffing shortages within the hospital systems.
Foreign Exchange Headwinds: Foreign exchange is a major headwind for Edwards Lifesciences due to a considerable percentage of its revenues coming from outside the United States. We remain worried about the significant challenges Edward Lifesciences had to face owing to the unfavorable foreign currency impact that has adversely affected the company’s gross margin over the past few quarters.
EW Stock Estimate Trends
The Zacks Consensus Estimate for Edwards Lifesciences’ 2024 earnings per share (EPS) has fallen 2 cents to $2.56 in the past 30 days.
The Zacks Consensus Estimate for the company’s 2024 revenues is pegged at $5.82 billion, down 3.1% from the year-ago reported number.
Key Picks
Some better-ranked stocks in the broader medical space are Haemonetics (HAE - Free Report) , Boston Scientific (BSX - Free Report) and Penumbra (PEN - Free Report) .
Haemonetics has an earnings yield of 5.41% compared with the industry’s 1.75%. Haemonetics’ earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed on one occasion, the average surprise being 2.82%. Its shares have risen 8.9% compared with the industry’s 21.2% growth in the past year.
HAE carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Boston Scientific, carrying a Zacks Rank #2 at present, has a long-term estimated earnings growth rate of 13.8%. Shares of the company have surged 63.4% compared with the industry’s 23.1% growth. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.29%.
Penumbra, carrying a Zacks Rank #2 at present, has an estimated earnings growth rate of 35.3% for 2024 compared with the industry’s 12.8%. Shares of Penumbra have risen 7.8% compared with the industry’s 15.1% growth over the past year. PEN’s earnings surpassed estimates in three of the trailing four quarters and missed in one, the average surprise being 10.54%.