Edwards Lifesciences Rebounds and Then Some; Raising Our Fair Value Estimate

As with many medical device firms, narrow-moat Edwards Lifesciences saw strong performance in second quarter, fueled by the resumption of cardiac procedures as vaccinations have taken hold. After adjusting our full-year projections for transcatheter aortic valves, surgical valves, and critical care slightly upward, we’re raising our fair value estimate to $84 per share, up from $72, to better reflect what we suspect may be more robust flow of new patients into the referral and treatment pipeline. These adjustments were partially offset by our expectation that the U.S. corporate tax rate will rise to 26% after 2021. Nonetheless, shares remain overvalued, from our perspective.