EW: Long-Term TAVR Durability Will Drive Future Low-Risk Expansion

Analysts have modestly raised their fair value estimate for Edwards Lifesciences to approximately $95 from about $94, reflecting a blend of slightly lower perceived risk, resilient high-20s profit margin expectations, and stronger confidence in long term transcatheter aortic valve replacement growth following robust Q3 results and favorable recent clinical and coverage catalysts.

Analyst Commentary

Street research sentiment around Edwards Lifesciences has turned more constructive, with multiple firms lifting ratings and price targets following strong Q3 execution, favorable TAVR data presentations, and improving confidence in long term growth durability.

Bullish Takeaways

Bullish analysts are raising price targets into the low to mid $90s, with one major global bank now targeting above $100. This reflects increased confidence in Edwards' ability to sustain high single digit to low double digit top line growth and expand earnings.
Upgrades to Buy equivalents cite accelerating transcatheter aortic valve replacement growth, supported by high frequency market data and robust seven year durability outcomes that could underpin higher penetration in low risk patient segments.
Recent TCT and PARTNER 3 readouts are viewed as clearing events that alleviate worst case fears and reinforce TAVR's competitive positioning versus surgery. This supports higher utilization assumptions and improved long term cash flow visibility.
Management's decision to guide full year 2025 revenue toward the high end of prior ranges and lift adjusted EPS targets is seen as evidence of strong execution and operating leverage. This underpins upward revisions to intrinsic value estimates.

Bearish Takeaways

Bearish analysts and more cautious voices, even where ratings have improved, continue to anchor fair value in a lower $70 to mid $80 range. They argue that the recent share price rebound may already discount much of the positive TAVR and symposium news.
Some remain concerned that, despite better than feared durability data, lingering uncertainties around long term TAVR performance and competitive dynamics could cap upside to volume growth and limit multiple expansion.
Hold rated commentary highlights the risk that current expectations for accelerating U.S. TAVR in the near term could prove aggressive if macro, reimbursement, or procedural capacity constraints emerge. This could create potential for sentiment driven volatility.
There is also caution that elevated expectations around new product launches and incremental structural heart markets, such as transcatheter tricuspid replacement, may take longer to meaningfully contribute to earnings than bulls currently model.

What's in the News

Announced strong one year ENCIRCLE trial results for the SAPIEN M3 TMVR system and positive real world registry data for the EVOQUE TTVR system, showing high rates of valve regurgitation elimination and low complication rates, reinforcing leadership in mitral and tricuspid therapies (Key Developments).
Reported seven year PARTNER 3 and ten year PARTNER 2 data demonstrating durable long term outcomes and comparable valve performance between SAPIEN 3 TAVR and surgery, supporting sustained confidence in TAVR durability across risk profiles (Key Developments).
Raised full year 2025 total sales growth outlook to the high end of 9% to 10%, indicating increasing management confidence in revenue momentum (Key Developments).
Provided fourth quarter 2025 sales guidance of $1.51 billion to $1.59 billion, giving clearer visibility into near term operating performance (Key Developments).
Disclosed a planned transition of Chief Financial Officer Scott Ullem by mid 2026, with an orderly succession and advisory role to support continuity in financial leadership (Key Developments).

Valuation Changes

Fair Value Estimate has risen slightly to approximately $95.37 from about $93.94, reflecting a modest upward revision in intrinsic value.
Discount Rate has fallen marginally to about 7.71% from roughly 7.73%, indicating a slightly lower perceived risk profile.
Revenue Growth has edged down slightly to around 9.81% from approximately 9.91%, suggesting a minor tempering of long term top line expectations.
Net Profit Margin has increased modestly to roughly 24.69% from about 24.01%, implying slightly stronger anticipated profitability.
Future P/E has declined slightly to about 34.6x from roughly 34.95x, indicating a small reduction in the valuation multiple applied to forward earnings.

Strategic product launches, like the TAVR approval and EVOQUE, position Edwards for significant revenue growth and expanded market share.
Investments in surgical innovation and operational efficiency mitigate financial threats, enhance global therapy adoption, and stabilize earnings.
Tariffs, competitive pressures, and strategic investments could impact Edwards Lifesciences' margins and revenue growth, requiring careful financial planning to achieve targets.

Catalysts

About Edwards Lifesciences

Provides products and technologies to treat advanced cardiovascular diseases in the United States, Europe, Japan, and internationally.What are the underlying business or industry changes driving this perspective?

The expected approval of the early TAVR indication in the second quarter, along with policy and guideline changes in the U.S. and globally, represents a multiyear growth opportunity that could significantly enhance revenue streams in the future.
The planned launch of the transcatheter tricuspid valve EVOQUE in 2024 is anticipated to uniquely position Edwards to gain market share and increase revenues as it becomes the first company to develop and offer this therapy.
The recent approval of the Sapien M3 in Europe as the world's first transcatheter mitral valve replacement system signals Edwards' ability to address large, unmet patient needs, which could result in substantial revenue growth.
Edwards' ongoing investments in surgical innovation, such as the RESILIA tissue technology, are likely to expand access and adoption of its cardiovascular therapies globally, potentially improving net margins and bolstering revenue.
The company's plan to mitigate the financial impacts of announced tariffs and the JenaValve acquisition while maintaining its EPS guidance of $2.40 to $2.50 demonstrates an operational efficiency that could positively impact earnings.

Edwards Lifesciences Earnings and Revenue Growth

Edwards Lifesciences Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Edwards Lifesciences's revenue will grow by 10.0% annually over the next 3 years.
Analysts assume that profit margins will shrink from 24.8% today to 23.7% in 3 years time.
Analysts expect earnings to reach $1.8 billion (and earnings per share of $3.09) by about September 2028, up from $1.4 billion today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as $1.5 billion.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 35.1x on those 2028 earnings, up from 33.2x today. This future PE is greater than the current PE for the US Medical Equipment industry at 29.7x.
Analysts expect the number of shares outstanding to decline by 0.46% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.42%, as per the Simply Wall St company report.

Edwards Lifesciences Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Edwards Lifesciences faces potential financial risks due to the impact of tariffs, which could affect the company's gross margins and net earnings, as they anticipate a $0.05 EPS impact from current tariffs in 2025, with greater impacts expected in 2026.
The acquisition of JenaValve may lead to an EPS dilution of $0.05 to $0.10, which could strain operating margins and necessitate careful planning to offset the acquisition costs in order to maintain earnings per share targets.
The competitive pressure in international markets, such as Japan, is exerting downward pressure on TAVR procedure growth, potentially impacting revenue growth and expansion efforts in these regions.
While Edwards anticipates expanding TAVR indications to asymptomatic patients, the regulatory and policy changes required for this may take longer than expected, delaying the projected revenues from this expanded patient base.
High levels of discretionary R&D spending, as well as necessary strategic investments to offset EPS impacts, indicate that operating expenses could rise, potentially impacting net profit margins if the expected growth in revenues does not materialize accordingly.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $87.731 for Edwards Lifesciences based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $101.0, and the most bearish reporting a price target of just $72.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $7.6 billion, earnings will come to $1.8 billion, and it would be trading on a PE ratio of 35.1x, assuming you use a discount rate of 7.4%.
Given the current share price of $79.8, the analyst price target of $87.73 is 9.0% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

Have other thoughts on Edwards Lifesciences?

Create your own narrative on this stock, and estimate its Fair Value using our Valuator tool.

Create Narrative

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Durability Data And Real-World Evidence Will Shape Risk And Opportunity Ahead