On Thursday, Canaccord Genuity (TSX:CF) maintained a Hold rating on Edwards Lifesciences (NYSE: NYSE:EW) and increased the price target to $68 from $63, though analyst targets range from $63 to $97. Currently trading at $74.20, InvestingPro analysis suggests the stock is slightly undervalued. The adjustment follows Edwards Lifesciences' annual investor conference, during which the company presented its financial outlook for 2025 and discussed its anticipated growth drivers.
The company reflected on the past year, acknowledging the challenges it faced, particularly with its Transcatheter Aortic Valve Replacement (TAVR) segment. Despite these issues, Edwards has made strategic moves, including the sale of its Critical Care business and a shift in focus towards all forms of structural heart disease. With a strong financial health score rated as "GREAT" by InvestingPro and more cash than debt on its balance sheet, these initiatives are seen as steps towards overcoming current growth challenges and leveraging potential future opportunities.
According to the analyst, TAVR remains the primary revenue source for Edwards, but the Transcatheter Mitral and Tricuspid Therapies (TMTT) segment is expected to exceed $500 million in sales and experience significant growth. The company also provided updates on its Structural Heart Failure and TAVR-AR segments, which are projected to have minimal revenue contributions in 2025.
Edwards Lifesciences has also highlighted the potential for an asymptomatic indication in Severe Aortic Stenosis from the PROGRESS trial results, which could be a key development for the company. Additionally, the analyst noted the capacity issues that have impacted TAVR growth throughout 2024 but anticipates a reacceleration of TAVR by the end of 2025.
The report concluded with a positive outlook for Edwards Lifesciences, projecting gross margin improvements in 2025 and operating leverage in subsequent years. The company already maintains an impressive 76.6% gross profit margin and trades at an attractive P/E ratio relative to its near-term earnings growth. The Hold rating reflects a cautious but stable view of the company's stock, with the new price target of $68 indicating a modest upside potential. InvestingPro subscribers can access 8 additional key insights and a comprehensive analysis of Edwards Lifesciences' financial health and growth prospects.
In other recent news, Edwards Lifesciences has reported robust earnings and revenue, with a projected revenue for the fiscal year 2025 to be between $5.6 billion and $6.0 billion. This aligns closely with Oppenheimer's expectation of $5.96 billion and the consensus estimate of $5.91 billion. The company's third-quarter sales also saw a 10% increase, reaching $1.35 billion. These recent developments highlight the company's strong financial performance.
The company's growth is expected to be driven by key points such as the EARLY-TAVR trial, which is projected to boost the growth of Transcatheter Aortic Valve Replacement procedures. Additionally, Edwards Lifesciences' Transcatheter Mitral and Tricuspid Therapies portfolio is anticipated to generate sales of approximately $2 billion by 2030.
In terms of analyst ratings, Oppenheimer maintained its Outperform rating and a $90.00 price target for Edwards Lifesciences. Goldman Sachs (NYSE:GS) also maintained a Buy rating with a price target of $80. On the other hand, Piper Sandler and BofA Securities reaffirmed their Neutral ratings.
Edwards Lifesciences has also been the focus of several key developments. The company's EVOQUE transcatheter tricuspid valve replacement system showed promising results in the TRISCEND II trial, and the company was recently removed from Citi's 90-Day Upside Catalyst Watch List.
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