EW – Market expectations are for Uniform ROA to expand, but management appears concerned about procedures, TAVR, and costs

• Edwards Lifesciences Corporation (EW:USA) trades near historical highs relative to UAFRS-based (Uniform) earnings, with a 41.1x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management appears concerned about procedure disruptions, TAVR adoption, and costs
  
  

• Specifically, management may have concerns about declining transcatheter procedures and R&D spend due to COVID-19, the results of their pipeline studies, and increases in their SG&A expenses due to headcount growth. In addition, they may lack confidence in their ability to sustain lower operating expenses, maintain strong global TAVR adoption, and expand the number of TAVR-trained centers. Moreover, they may be exaggerating the strength of their balance sheet and the likelihood of returning to normal volumes by Q4, and they may be downplaying concerns about procedure disruptions in Japan