J.P. Morgan Underweight on Edwards Lifesciences

J.P. Morgan Chase & Co. is out with a research report on Edwards Lifesciences

and it has an Underweight rating and $78 price target on shares. In a note to clients, J.P. Morgan Chase & Co. writes, "Risk became reality on Wednesday. After the close, CMS announced that it has opened a National Coverage Analysis (

) for TAVI. The decision comes in response to a formal request by the STS and ACC which cites a number of concerns with regard to center qualifications, operator training, and patient selection. For the last several months, we have viewed the potential for a NCA prior to Sapien's launch as the biggest risk for EW shares, indicating CMS's intention to manage the dissemination of TAVI technology and restrict early adoption. While this shouldn't be an issue early in the launch (year one), it has a high likelihood of impacting the trajectory of the subsequent ramp, as evidenced by our July survey of US physicians specifically on this topic and the potential risk (click here). We expect EW shares to now begin to discount this possibility, with the extent of the impact likely to be the seminal question surrounding the stock in the months ahead." Shares of EW closed at $75.87 yesterday.