On Monday, BofA Securities adjusted its stance on shares of Edwards Lifesciences (NYSE:EW), shifting from a Neutral to a Buy rating, and increased the price target to $90 from the previous $82. The medical device maker, currently trading at $73.80 with a market cap of $43.5 billion, shows promising fundamentals according to InvestingPro data, with impressive revenue growth of 24% in the last twelve months.
The firm's analyst anticipates a positive trajectory for the company's stock in 2025, driven by multiple potential catalysts and the strategic importance of its Transcatheter Aortic Valve Replacement (TAVR) technology.
The analyst noted that despite the earnings per share (EPS) being recalibrated for spin/deal dilution, there is an expectation for double-digit growth. This growth is likely to counterbalance the dilution from the JenaValve acquisition. InvestingPro analysis reveals the company maintains strong financial health with a "GREAT" overall score, supported by robust cash flows and a solid balance sheet.
New growth drivers such as treatment for asymptomatic TAVR, mitral clipping, and tricuspid replacement are expected to bolster revenue growth for 2025.
The analyst foresees the stock gaining momentum ahead of the anticipated pipeline developments set for 2026, which include moderate TAVR and mitral replacement. These developments are viewed as potential factors that investors could begin pricing into the stock well before the expected data release and FDA approval in the fall of 2026.
The price objective has been updated to $90, reflecting a 33 times multiple of the estimated 2026 earnings per share, an increase from the previous 30 times multiple. This adjustment is intended to account for the anticipated pipeline expansion and the strategic value of the company's offerings.
For a deeper understanding of Edwards Lifesciences' valuation and growth prospects, InvestingPro subscribers can access comprehensive Fair Value analysis and 10+ additional ProTips in our detailed research report.
In other recent news, Edwards Lifesciences has been the subject of various analyst adjustments following its annual investor day, where a promising multiyear outlook was presented. TD Cowen maintained a Hold rating on the company's stock, raising the price target from $70 to $75.
Similarly, Truist Securities also held its Hold rating, but increased the price target to $78 from $70. RBC Capital Markets, on the other hand, kept an Outperform rating while lifting the stock's price target to $85 from $80. Bernstein SocGen Group maintained its Market Perform rating with a steady price target of $72.00.
The company reiterated its 2024 guidance and introduced its 2025 projections, which align with current market estimates. These include a return to double-digit annual revenue growth and sustaining double-digit growth in earnings per share. The company also confirmed its corporate-wide sales growth guidance, excluding foreign exchange impacts, to be between 8% and 10% for 2024.
Edwards Lifesciences has set a Transcatheter Aortic Valve Replacement (TAVR) growth forecast at 5%-7% for 2025, with expectations to accelerate to mid-single to high-single digits in TAVR growth beyond 2026. The company also projected an 8%-10% increase in sales for 2025, with expectations to stabilize around 10% in the following years.
These recent developments reflect the company's strong financial performance and potential for future growth. However, the various Hold ratings suggest that while the company is poised for growth, analysts advise investors to maintain their current positions in the stock until further developments potentially alter the investment outlook.
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