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EW – Market expectations are for Uniform ROA to expand, but management may have concerns about sales declines, TAVR procedures, and demand

March 5, 2021

  • Edwards Lifesciences Corporation (EW:USA) trades above historical averages relative to UAFRS-based (Uniform) earnings, with a 46.9x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may have concerns about sales declines, TAVR procedures growth, and the demand for their therapies

  • Specifically, management may have concerns about sales declines, particularly in the TAVR and Surgical Structural Heart segment, and the American Heart Association’s ability to develop optimal standards of care for Aortic Stenosis. In addition, they may lack confidence in their ability to sustain TAVR procedure growth, maintain PASCAL leaflet repair performance, and help patients with aortic insufficiency through surgery. Furthermore, they may be concerned about their progress with transcatheter mitral and tricuspid therapies (TMTT), the sustainability of demand for intense surgery products, and the pace of vaccine distribution and its impact on procedures. Lastly, management may be overstating the capabilities of their minimal invasive therapies, and they may be concerned about continued referral softness in large centers