Edwards Lifesciences Corporation (NYSE:EW) just released its quarterly report and things are looking bullish. The company beat both earnings and revenue forecasts, with revenue of US$1.1b, some 5.7% above estimates, and statutory earnings per share (EPS) coming in at US$0.52, 31% ahead of 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. With this in mind, we’ve gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the consensus forecast from Edwards Lifesciences’ 25 analysts is for revenues of US$5.09b in 2021, which would reflect a decent 17% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to jump 63% to US$2.08. In the lead-up to this report, the analysts had been modelling revenues of US$5.10b and earnings per share (EPS) of US$2.05 in 2021. So it’s pretty clear that, although the analysts have updated their estimates, there’s been no major change in expectations for the business following the latest results.
The analysts reconfirmed their price target of US$88.23, showing that the business is executing well and in line with expectations. That’s not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Edwards Lifesciences at US$100.00 per share, while the most bearish prices it at US$64.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Edwards Lifesciences shareholders.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Edwards Lifesciences’ growth to accelerate, with the forecast 17% growth ranking favourably alongside historical growth of 12% per annum 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 9.8% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Edwards Lifesciences to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that there’s been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$88.23, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that 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.
It is also worth noting that we have found 2 warning signs for Edwards Lifesciences that you need to take into consideration.
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.