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4 Factors Driving Edwards Lifesciences to a New 52-Week High


Shares of Edwards Lifesciences Corporation EW scaled a new 52-week high of $138.82 on Mar 8, closing the session lower at $138.25. The company has outperformed the industry over the last three months. The stock has gained 16.9%, compared with the S&P 500’s 3% gain and the industry’s 9.2%.

The stock has a market cap of $29.04 billion. The company has a positive earnings surprise of 9.9% for the last four quarters. Also, it has a long-term expected earnings growth rate of 15.1%.

Further, the company’s estimate revision trend for the current year is favorable. In the past couple of months, 11 analysts moved north, with no movement in the opposite direction. Earnings estimates rose around 8.2% to $4.49 per share.

The company’s five-year historical growth rate is also favorable at 23.4% as compared with the industry’s 10.6% and the S&P 500’s 2.8%.

Edwards Lifesciences carries a Zacks Rank #2 (Buy). The company has an impressive Growth Style Score of B as well. Our Growth Style Score highlights all the vital metrics of a company’s financials to obtain a clearer picture of the quality and sustainability of its growth. Our research shows that stocks with Style Scores of A or B when combined with a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) offer the best investment opportunities.

Taking the stable stock performance into consideration, we expect Edwards Lifesciences to scale higher in the coming quarters based on several growth drivers:

Strong Fourth-Quarter Performance:

Edwards Lifesciences’ fourth-quarter 2017 performance was quite promising with revenues and earnings beating the Zacks Consensus Estimate. We are also encouraged by the strong performance by all three of the company’s product lines. The company also performed well with respect to gross and adjusted operating margin. The company is focusing on product innovation through research and development.

Solid Guidance:

Edwards Lifesciences has raised its 2018 sales expectations to the high end of the previously projected range of $3.5-$3.9 billion. The Zacks Consensus Estimate for full-year revenues is $3.71 billion, well within the guided range. Adjusted earnings per share expectation has also been raised to $4.43-$4.63 from the previous $4.10-$4.30. The Zacks Consensus Estimate for full-year adjusted earnings stands at $4.16, near the low end of the company’s guided range.

CE Mark for CENTERA Valve:

The market is upbeat about Edwards Lifesciences’ recent CE Mark for its self-expanding CENTERA valve. The regulatory approval is likely to boost the company's Transcatheter Heart Valves segment.

Acquisition of Harpoon Medical:

Edwards Lifesciences recently acquired Harpoon Medical, Inc. — a privately-held medical technology company focused on beating-heart repair for degenerative mitral regurgitation. Per the agreement, Harpoon Medical’s flagship beating-heart repair procedure for mitral valve patients — HARPOON system — will be added to Edward Lifesciences’ Surgical Heart Valve Therapy portfolio for treating structural heart diseases.

Other Key Picks

Other top-ranked stocks in the broader medical sector are PerkinElmer PKI, Bio-Rad Laboratories BIO and athenahealth, Inc. ATHN.

PerkinElmer has a long-term expected earnings growth rate of 12.3%. The stock carries a Zacks Rank #2.

Bio-Rad Laboratories sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here. The company has a long-term expected earnings growth rate of 20%.

athenahealth is a Zacks #1 Ranked player. The company has a long-term expected earnings growth rate of 21.5%.

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