Edwards Lifesciences cut by Wolfe Research on risk of US TAVR disappointing By Investing.com

Edwards Lifesciences (NYSE:) was cut to Underperform at Wolfe Research on Tuesday, with analysts assigning the stock a $57 per share price target.

Analysts said the firm sees a risk of US TAVR disappointment in the next one to two years as the category matures and competition rises.

US TAVR is the firm’s biggest concern, with analysts explaining: “We believe penetration (all aortic valve replacement) of severe symptomatic aortic stenosis incidence 65%+ in US with TAVR center network ~fully built. Next 1-2 years, US TAVR market likely goes from two to four players. ABT entering now with limited risk label, while BSX expected to launch 4Q24 with all surgical risk indications. These launches perhaps add tension to share and price.”

While Wolfe Research expects EW to remain the clear category leader and grow US TAVR revenue, they believe growth disappoints over the mid-run due to structural considerations.

Meanwhile, another concern for the Wall Street firm is EBIT margin. “New forecast anchors to ‘margin maintenance’. Street expects expansion. Oft discussed is R&D leverage opportunity since current spend is 18% of revenue. We model this but see offsets in gross margin and sales & marketing. US competition risk influences gross margin thinking – little bit of pressure perhaps if price rounds down after years of stability,” wrote the analysts.