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 4.6% to US$220 in the past week. Results were roughly in line with estimates, with revenues of US$4.3b and statutory earnings per share of US$4.93. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the latest consensus from Edwards Lifesciences's 22 analysts is for revenues of US$4.87b in 2020, which would reflect a solid 12% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to step up 14% to US$5.72. Before this earnings report, analysts had been forecasting revenues of US$4.80b and earnings per share (EPS) of US$5.61 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$258. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Edwards Lifesciences, with the most bullish analyst valuing it at US$300 and the most bearish at US$179 per share. 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.
Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. Next year brings more of the same, according to analysts, with revenue forecast to grow 12%, in line with its 12% annual growth over the past five years. Compare this with the wider market, which analyst estimates (in aggregate) suggest will see revenues grow 7.9% next year. So it's pretty clear that Edwards Lifesciences is forecast to grow substantially faster than its market.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Edwards Lifesciences going out to 2024, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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