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What’s behind Edwards Lifesciences’ Stock Rise?

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Stock performance

On March 27, 2018, Edwards Lifesciences (EW) closed at $138.11. The company registered strong 4Q17 and fiscal 2017 earnings results on February 1, 2018, and its stock reached an all-time high of $143.22 on March 16, 2018. EW stock gained more than 7% after its earnings results announcement, and most analysts raised their target prices on the stock for the next 12 months thanks to optimistic performance expectations. The results maintained the upward trend the stock had been following due to strategic acquisitions and product launches. EW stock is currently trading higher than its 200-day moving average of $118.82 and its 50-day moving average of $135.32.

On the company’s investor day on December 7, 2017, EW stock rose ~3.6, driven by the company’s strong growth estimates, attractive product pipeline, robust fundamentals, and strategies for continued growth.

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Notably, Edwards Lifesciences’ 3Q17 results missed analysts’ estimates, prompting its stock to fall more than 9% on October 2, 2017, the day of its earnings release. Although the stock then encountered bearishness, this trend reversed following key product launches and acquisitions. The stock reached an all-time high on March 16, 2018, triggered by positive investor sentiment.

Market comparison

Year-to-date, EW stock has returned ~21.4%. Its six-month return was ~26% and its one-year return was ~45% as of March 28, 2018. In comparison, the S&P 500, which represents the market, had returned ~10% over the last year, and the Health Care Select Sector SPDR ETF (XLV) had returned ~8.3%. As of March 28, 2018, peers Medtronic (MDT), Abbott Laboratories (ABT), and Boston Scientific (BSX) had returned -3.3%, 32.6%, and 9%, respectively, over the last year.

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