Following recent developments at Edwards Lifesciences
(NYSE: EW)
, the company is expecting lower earnings per share in 2025 compared to its 2024 forecast.
Analysts at Wells Fargo reduced their price target for the company in response to that as CEO Bernard Zovighian played down negative reactions by investors, speaking at the Wells Fargo Healthcare Conference last week.
Shares of EW have been down about 4% over the past five days, though they have been up 1% over the past month.
Edwards has been very active in the M&A market, but also faced a tough response to its second-quarter earnings at the end of July. Zovighian said: “No one feels good about this kind of reaction… The message to investors is: It’s important to look at the big picture.”
The big picture includes some significant changes at Edwards, with the company completing the sale of its Critical Care business to BD last week. However, days later, the company announced a 3% workforce reduction in the wake of that sale. These changes, along with the significant outlays on acquisitions, raised questions around the company’s future financial performance.
Officials declined to provide EPS guidance for 2025, but made it clear that they expect a dip compared to this year.
“There are estimates on Wall Street that show earnings per share going up in 2025,” said CFO Scott Ullem. “That’s not going to happen. Our earnings per share will be lower in 2025 than they are in 2024.”
Zovighian remains confident in the company’s business, particularly transcatheter aortic replacement valves (TAVR). He touted not only the potential but also the trajectory of TAVR, despite the company’s reduction of its TAVR guidance at the end of last quarter. Edwards said it expects TAVR sales to grow 5% to 7% in 2024, rather than the previous 8% to 10% projection.
With the company expects a transitional year in 2025, followed by growth beyond then, Zovighian’s message to investors is still a confident one.
“The message is, we are a global leader and successful company,” he said. “We are in big, growing markets. We should feel very excited about what’s ahead of us.”
