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The firm’s decision is based on a reassessment of the company’s growth prospects, citing a higher likelihood of Edwards Lifesciences sustaining double-digit growth in revenue and earnings per share (EPS).
The upgrade follows the unexpected approval of Evoque and the anticipation that there will not be a competing Transcatheter Aortic Valve Replacement (TAVR) product from Boston Scientific (NYSE:BSX) in the second half of 2024. BofA Securities believes that Edwards Lifesciences is positioned to continue exceeding performance expectations, with EPS projected to grow sustainably at a rate of over 10%.
This optimism is further supported by upcoming events and potential catalysts such as the American College of Cardiology (ACC) meeting, the Transcatheter Cardiovascular Therapeutics (TCT) conference, and the planned spin-off of the critical care division.
The firm also points to the SMART trial as a potential positive for Edwards Lifesciences relative to investor expectations. The trial’s favorable risk/reward profile could contribute to the company’s success. Moreover, the planned spin-off of the critical care business is expected to enhance Edwards Lifesciences’ strategic value over time.
The new price objective of $105.00 is set at 35 times the projected 2025 EPS, an increase from the prior multiple of 32. This adjustment reflects the firm’s confidence in Edwards Lifesciences’ ability to maintain its growth trajectory and deliver shareholder value.
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