Edwards Lifesciences (EW) PT Lowered to $114 at Stifel, 'Buy' Kept
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Stifel analyst Rick Wise lowered his price target on Edwards Lifesciences (NYSE: EW) to $114.00 (from $122.00) following results but maintained a Buy rating.
Wise commented, "While roughly matching both our projections and company guidance, EW's 3Q sales results -- specifically the critical THVT (Transcatheter Heart Therapy) franchise -- fell short of Street expectations by ~$15M (or 4%). Already down in the aftermarket, EW shares undoubtedly will trade lower tomorrow as well, in our view. Despite this shortfall relative to consensus, we do not believe the that either the company’s fundamental outlook, or the TAVR market’s growth potential, or EW’s THVT growth specifically has meaningfully, if at all, changed following 3Q results. Multiple “reasonable” factors could explain why 3Q WW transcatheter valve sales growth would have come in below lofty Street expectations, including: (1) The Street just got overly exuberant after the superb Partner III data presented in April at ACC; (2) 3Q sales only included six weeks of Intermediate Risk approval post the August 18 FDA announcement; (3) the expected temporary French sales halt due to fully-utilized reimbursement quotas lopped off ~$5M from 3Q numbers. But we continue to see the WW TAVR market nearly doubling in size from ~$2.6B today, to at least $5B by 2020...and this 2020 estimate only modestly contemplates the impact of a potential later-in-decade, Low-Risk indication label expansion. But near term, we suspect the stock will remain pressured as some Street estimates are recalibrated lower. As well, for the next month or so, the absence of any real, clear-cut catalysts could keep the stock in a narrow range at least until the company's December 8th, NYC analyst day, which could be a better barometer to gauge IR adoption. We maintain our EW Buy rating and modestly lower our 4Q16 and 2017 estimates (explained below) and lower our TP to $114, reflecting the impact of "multiple compression" rather than any meaningful, out-year negative earnings revisions."
Shares of Edwards Lifesciences closed at $113.68 yesterday.
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