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Edward Lifesciences Hits Record High After Earnings Beat, TAVR Forecast

Edwards Lifesciences said its sees transcatheter aortic valve replacement (TAVR) sales rising as high as 20% this year.

Edward Lifesciences  (EW) - Get Edwards Lifesciences Corporation Report shares hit an all-time high Wednesday after the medical devices maker posted Street-beating first quarter earnings as post-COVID procedures gathered past in the waning months of the pandemic.

The Irvine, California-based group generated revenues of $1.22 billion over the first three months of the year, with a bottom life of 54 cents per share, thanks in part to nearly $800 million in sales from its transcatheter aortic valve replacement, or TAVR, unit, which it expects to grow by as much as 20% this year.

TAVR is a minimally invasive heart procedure that is used to repair narrow aortic valves in patients that are often at high risk from complications linked to open-heart surgery.

"We are encouraged that U.S. TAVR procedures grew as COVID hospitalizations decrease and vaccinations increased during the quarter" CEO Michael Mussallem told investors on a conference call late Tuesday. " based on the strength we saw at the end of the first quarter, we have confidence that the underlying TAVR sales will grow in the 15% to 20% range in 2021."

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"We expect continued near-term COVID-related regional disruptions and a more normalized second half of the year," he added. "We remain confident that this large global opportunity will exceed $7 billion by 2024, which implies a compounded annual growth rate in the low double-digits."

Edward Lifesciences shares were marked 4.8% higher in early trading Wednesday to change hands at $93.94 each, after hitting an all-time high of $94.00 earlier in the session, in a move that extends their 52-week gain to around 30%.

"As part of an encouraging kick-off to Med Tech earnings, Edward Lifesciences delivered unexpected upside in sales and EPS, led by TAVR and particularly surprising strength in 'outside the U.S. TAVR," said Credit Suisse analyst Matt Miksic, who nudged his price target by $1 to $112 per share and maintained his overweight rating following the earnings report. 

"While management described the journey through the quarter as ‘choppy’, but exited the quarter in a stronger position with greater confidence in the outlook for the rest of the year," he added. "We continue to see further upside to the rest of 2021, and expect additional upward estimate revisions be among the key catalysts that drive EW higher over the next 12 months."