Edwards Lifesciences (NYSE:EW) traded lower in the pre-market Tuesday after Wolfe Research downgraded the medical device maker to Underperform from Peer Perform, setting its expectations below consensus on emerging competition.
Edwards (EW) is a dominant player in the market for transcatheter aortic valve implantation (TAVR). The maker of SAPIEN 3 heart valves is likely to see four players in the U.S. TAVR market over the next 1-2 years, up from two currently, analyst Mike Polark argues.
Polark cites upcoming rival products from Abbott Laboratories (ABT) and Boston Scientific (BSX). “These launches perhaps add tension to share and price. So…category slowing naturally due to high penetration rates while share and price risks rise as competition increases,” Polark wrote.
As the category matures and new competition emerges, the analyst expects the U.S. TAVR market to disappoint over the next 1-2 years. Polark is 1% and 4% below consensus on Edwards’ (EW) 2024 revenue and earnings, and his five-year projections for the same measures stand 15% and 22% below, respectively.
Citing pricing headwinds and aggressive sales & marketing amid emerging U.S. competition, the analyst argues that Street’s mid-term estimates for the company’s margins are “too optimistic.” Wolfe sets a $57 per share target for the stock.
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