Edwards Lifesciences shares (EW) plummeted about 31% in today’s trading after J.P. Morgan and Truist both downgraded the medical technology company. Indeed, the firm announced on July 24 that it expects slower growth in 2024 for its transcatheter aortic valve replacements. J.P. Morgan changed its rating from Outperform to Neutral, while Truist downgraded it from Buy to Hold.
This was clearly a big deal to both analysts and investors because it represents a huge chunk of the company’s revenue stream. In fact, almost two-thirds of sales come from transcatheter aortic valve replacements, as pictured below.
Due to this outlook and mixed Q2 results, J.P. Morgan’s Robbie Marcus said he doesn’t expect Edwards to grow over 10% in 2025 and 2026, so he lowered his revenue and profit forecasts. Marcus also cut his price target to $72 from $105. In addition, Truist’s Richard Newitter mentioned that while the long-term potential is still there, the expected revenue boost for late 2024 and 2025 has taken a hit, so he lowered his price target to $82 from $110.
It’s worth noting that both these analysts are highly rated on TipRanks with solid track records.
Is EW Stock a Buy or Sell?
Overall, analysts have a Moderate Buy consensus rating on EW stock based on 13 Buys, seven Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 32% decline in its share price over the past year, the average EW price target of $98.94 per share implies 61.56% upside potential.
