Edwards Lifesciences Faces Market Struggles Despite Steady Earnings Growth
Edwards Lifesciences Corporation (EW), based in Irvine, California, specializes in products for structural heart disease and critical care monitoring. The company boasts a market cap of $41.4 billion and offers a range of products, including tissue replacement heart valves, heart valve repair solutions, hemodynamic monitoring devices, angioscopy equipment, oxygenators, and pharmaceuticals.
Stock Performance Underwhelms Against Major Indices
In the past year, Edwards Lifesciences’ stock has not performed well compared to the broader market. Over this period, EW has increased by only 3.5%, while the S&P 500 Index ($SPX) surged nearly 30.1%. Furthermore, EW’s stock has dropped 8.8% in 2024, contrasting sharply with the SPX’s impressive 24.1% rise year to date.
ETF Comparison Shows Clear Disadvantage
When comparing EW’s performance to the iShares U.S. Medical Devices ETF (IHI), the gap widens. The ETF has advanced around 21.7% over the past year, showcasing growth of 11.1% so far in 2024, while EW’s losses remain in the single digits within the same timeframe.
Quarterly Results Show Revenue Growth
On October 24, EW’s shares closed slightly lower following the release of its Q3 results. The company’s adjusted earnings per share (EPS) reached $0.67, aligning with Wall Street’s expectations. Revenue for the quarter was $1.4 billion, reflecting an 8.9% year-over-year increase. Looking ahead to Q4, Edwards Lifesciences projects revenue between $1.3 billion and $1.4 billion.
Future Earnings Expectations Remain Positive
Analysts anticipate that EW’s EPS will rise by 2.4% to $2.57 on a diluted basis for the current fiscal year, ending in December. Notably, Edwards Lifesciences has a strong record of meeting or exceeding earnings expectations, having done so in the last four quarters.
Analyst Outlook and Ratings
A consensus among the 27 analysts covering EW stock rates it as a “Moderate Buy.” This assessment comprises eight “Strong Buy” ratings, one “Moderate Buy,” and 18 “Holds.” However, this outlook has become less optimistic over the past month, as nine analysts previously favored a “Strong Buy.”
On October 29, Oppenheimer analyst Suraj Kalia reaffirmed a “Buy” rating on EW with a price target of $90, indicating a potential upside of 29.4% from current levels. In addition, the average price target stands at $74.67, suggesting a 7.4% premium over EW’s current trading price.
On the date of publication, Neha Panjwani did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are provided solely for informational purposes. For more details, please view the Barchart Disclosure Policy here.
The views expressed here are those of the author and do not necessarily reflect those of Nasdaq, Inc.
