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Analyst Estimates: Here's What Brokers Think Of Edwards Lifesciences Corporation (NYSE:EW) After Its Full-Year Report

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Simply Wall St
·4 min read
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Last week, you might have seen that Edwards Lifesciences Corporation (NYSE:EW) released its annual result to the market. The early response was not positive, with shares down 3.4% to US$82.58 in the past week. It was a credible result overall, with revenues of US$4.4b and statutory earnings per share of US$1.30 both in line with analyst estimates, showing that Edwards Lifesciences is executing in line with expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Edwards Lifesciences

earnings-and-revenue-growth
earnings-and-revenue-growth

Taking into account the latest results, the current consensus from Edwards Lifesciences' 25 analysts is for revenues of US$5.05b in 2021, which would reflect a decent 15% increase on its sales over the past 12 months. Statutory earnings per share are predicted to soar 46% to US$1.93. Before this earnings report, the analysts had been forecasting revenues of US$5.10b and earnings per share (EPS) of US$2.02 in 2021. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

The consensus price target held steady at US$93.32, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Edwards Lifesciences analyst has a price target of US$111 per share, while the most pessimistic values it at US$64.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Edwards Lifesciences' rate of growth is expected to accelerate meaningfully, with the forecast 15% revenue growth noticeably faster than its historical growth of 11%p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.4% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Edwards Lifesciences is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$93.32, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Edwards Lifesciences analysts - going out to 2024, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for Edwards Lifesciences you should know about.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.