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EW Stock Dips Following the Divestiture of Critical Care Wing
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Edwards Lifesciences (EW - Free Report) has completed the sale of its Critical Care product group to Becton, Dickinson and Company (BDX - Free Report) for $4.2 billion in an all-cash transaction. The divestiture was first announced earlier in June 2024, replacing the previous plan for a tax-free spin-off of the segment.
The company will use the net proceeds from the sale to fund strategic initiatives, including the previously announced acquisitions and share repurchases.
Investors’ sentiment was bearish immediately after the news release yesterday, with the stock dipping 1.7%. Also, shares were down 0.3% in aftermarket trading. However, considering the company’s strategic planning and executions associated with this divestiture, we expect shares to turn around shortly.
Critical Care Sale Bolsters EW’s Structural Heart Strategy
Edwards’ Critical Care has a rich history of pioneering innovations. Through this sale, the company gains increased balance sheet flexibility for disciplined investments in technologies for aortic, mitral, tricuspid and pulmonic patients, as well as new therapeutic areas for interventional heart failure.
The Critical Care separation is expected to enhance Edwards’ global leadership in structural heart innovations by focusing on addressing large unmet patient needs. Within its existing business, the company sees significant opportunities for Transcatheter Aortic Valve Replacement (“TAVR”) to grow and improve how Aortic Stenosis patients are treated. Additionally, the contribution of Transcatheter Mitral Tricuspid Therapy to the company’s growth is still in the early stages, indicating strong potential.
Image Source: Zacks Investment Research
Edwards is also advancing its capabilities in Surgical solutions. Furthermore, the company will concentrate on patients in need of therapies to treat aortic regurgitation and non-valvular structural heart disease through implantable technologies.
EW Initiates New Buyback Plan
The company announced that its board of directors has authorized an additional $1.5 billion for share repurchase. Edwards recently entered into a $500 million Accelerated Share Repurchase agreement. Previously, in August, EW repurchased $500 million of common stock through a 10b5-1 agreement and open market repurchases. Following this $1 billion share repurchase, the company has $1.4 billion in remaining authorization for additional future share repurchases.
Industry Prospects in Favor of Edwards
According to a Grand View Research report, the global structural heart devices market was valued at $6.33 billion in 2022 and is expected to witness a compound annual growth rate (CAGR) of 9.3% by 2030.
Nearly 60 million people in the United States, representing around 20-25% of the country’s adult population, have structural defects in their hearts. This indicates the huge scope of structural heart devices in addressing the issues. Industry players are investing heavily in research and development procedures to launch effective products and stay competitive in the market. In addition, the improving U.S. reimbursement scenario is likely to make TAVR procedures more affordable in the coming years.
Edwards’ Recent Developments
In July 2024, Edwards announced two strategic acquisitions, reflecting its commitment to advancing patient care through structural heart innovation, addressing large unmet patient needs and driving sustainable long-term growth. The company agreed to acquire JenaValve Technology — a pioneer in the transcatheter treatment of aortic regurgitation — and exercised its option to acquire Endotronix, a leader in heart failure management solutions. The aggregate upfront purchase price for these strategic investments is approximately $1.2 billion.
However, the completion of the abovementioned acquisitions is subject to the satisfaction of certain closing conditions, including the receipt of required antitrust and foreign investment approvals.
EW Stock Price Performance
In the past year, EW shares have declined 9.5% against the industry’s growth of 13.2%.
Consensus Estimates for EW
The Zacks Consensus Estimate for Edwards’ 2024 earnings stands at $2.70 per share, an improvement of 7.6% year over year. Additionally, revenues are expected to increase by 6.9% to $6.42 billion.
Exact Sciences’ shares have plunged 27.6% in the past year. Estimates for the company’s loss per share have improved from $1.14 to 95 cents in 2024 and from 19 cents to 6 cents in 2025 in the past 30 days. EXAS’ earnings beat estimates in three of the trailing four quarters and matched in one, delivering an average surprise of 56.2%. In the last reported quarter, it posted an earnings surprise of 75.7%.
Estimates for AxoGen’s 2024 loss per share have narrowed to 1 cent from 19 cents in the past 30 days. Shares of the company have surged 108.7% in the past year compared with the industry’s growth of 10.9%. AXGN’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 96.5%. In the last reported quarter, it delivered an earnings surprise of 200%.
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Edwards Lifesciences (EW - Free Report) has completed the sale of its Critical Care product group to Becton, Dickinson and Company (BDX - Free Report) for $4.2 billion in an all-cash transaction. The divestiture was first announced earlier in June 2024, replacing the previous plan for a tax-free spin-off of the segment.
The company will use the net proceeds from the sale to fund strategic initiatives, including the previously announced acquisitions and share repurchases.
Investors’ sentiment was bearish immediately after the news release yesterday, with the stock dipping 1.7%. Also, shares were down 0.3% in aftermarket trading. However, considering the company’s strategic planning and executions associated with this divestiture, we expect shares to turn around shortly.
Critical Care Sale Bolsters EW’s Structural Heart Strategy
Edwards’ Critical Care has a rich history of pioneering innovations. Through this sale, the company gains increased balance sheet flexibility for disciplined investments in technologies for aortic, mitral, tricuspid and pulmonic patients, as well as new therapeutic areas for interventional heart failure.
The Critical Care separation is expected to enhance Edwards’ global leadership in structural heart innovations by focusing on addressing large unmet patient needs. Within its existing business, the company sees significant opportunities for Transcatheter Aortic Valve Replacement (“TAVR”) to grow and improve how Aortic Stenosis patients are treated. Additionally, the contribution of Transcatheter Mitral Tricuspid Therapy to the company’s growth is still in the early stages, indicating strong potential.
Image Source: Zacks Investment Research
Edwards is also advancing its capabilities in Surgical solutions. Furthermore, the company will concentrate on patients in need of therapies to treat aortic regurgitation and non-valvular structural heart disease through implantable technologies.
EW Initiates New Buyback Plan
The company announced that its board of directors has authorized an additional $1.5 billion for share repurchase. Edwards recently entered into a $500 million Accelerated Share Repurchase agreement. Previously, in August, EW repurchased $500 million of common stock through a 10b5-1 agreement and open market repurchases. Following this $1 billion share repurchase, the company has $1.4 billion in remaining authorization for additional future share repurchases.
Industry Prospects in Favor of Edwards
According to a Grand View Research report, the global structural heart devices market was valued at $6.33 billion in 2022 and is expected to witness a compound annual growth rate (CAGR) of 9.3% by 2030.
Nearly 60 million people in the United States, representing around 20-25% of the country’s adult population, have structural defects in their hearts. This indicates the huge scope of structural heart devices in addressing the issues. Industry players are investing heavily in research and development procedures to launch effective products and stay competitive in the market. In addition, the improving U.S. reimbursement scenario is likely to make TAVR procedures more affordable in the coming years.
Edwards’ Recent Developments
In July 2024, Edwards announced two strategic acquisitions, reflecting its commitment to advancing patient care through structural heart innovation, addressing large unmet patient needs and driving sustainable long-term growth. The company agreed to acquire JenaValve Technology — a pioneer in the transcatheter treatment of aortic regurgitation — and exercised its option to acquire Endotronix, a leader in heart failure management solutions. The aggregate upfront purchase price for these strategic investments is approximately $1.2 billion.
However, the completion of the abovementioned acquisitions is subject to the satisfaction of certain closing conditions, including the receipt of required antitrust and foreign investment approvals.
EW Stock Price Performance
In the past year, EW shares have declined 9.5% against the industry’s growth of 13.2%.
Consensus Estimates for EW
The Zacks Consensus Estimate for Edwards’ 2024 earnings stands at $2.70 per share, an improvement of 7.6% year over year. Additionally, revenues are expected to increase by 6.9% to $6.42 billion.
Zacks Rank and Top MedTech Stocks
Edwards currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are Exact Sciences (EXAS - Free Report) and AxoGen (AXGN - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Exact Sciences’ shares have plunged 27.6% in the past year. Estimates for the company’s loss per share have improved from $1.14 to 95 cents in 2024 and from 19 cents to 6 cents in 2025 in the past 30 days. EXAS’ earnings beat estimates in three of the trailing four quarters and matched in one, delivering an average surprise of 56.2%. In the last reported quarter, it posted an earnings surprise of 75.7%.
Estimates for AxoGen’s 2024 loss per share have narrowed to 1 cent from 19 cents in the past 30 days. Shares of the company have surged 108.7% in the past year compared with the industry’s growth of 10.9%. AXGN’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 96.5%. In the last reported quarter, it delivered an earnings surprise of 200%.