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Edwards Lifesciences Faces 'Sell Event,' Citi Warns

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Citi's Amit Hazan maintained a Sell rating on Edwards Lifesciences Corp (NYSE: EW), with a price target of $67.

"The practical benefits of 'superiority' for Sapien 3 TAVR results at ACC late next month are being mostly over exaggerated by Street, in our view, with very high expectations for such an outcome now having created a likely 'sell on the news' event for the stock," Hazan elaborated.

The analyst and the Street expected the intermediate risk data would be strong and approval the Sapien 3 arm would occur in 2H16. Due to this, over the past few weeks, the Street has been pricing in a "superiority" outcome for the study.

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However, Hazan believes the possible outcome would be a "practical non-event in the real world, where surgeons are already sold on TAVR for intermediate risk patients and are likely to see limitations even if S3 data is superior."

At present, the consensus expectations already priced in a meaningful ramp in volume following the FDA approval.

"We have and continue to believe that those high expectations will disappoint after approval, and we now believe 'superiority' expectations are largely reflected in shares and thus set up a more likely 'sell on the news' event at ACC next month," Hazan cautioned.

Latest Ratings for EW

DateFirmActionFromTo
Apr 2020Wells FargoDowngradesOverweightEqual-Weight
Apr 2020Raymond JamesMaintainsOutperform
Apr 2020CFRAMaintainsBuy

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