Edwards Lifesciences Wraps Up 2022 as Expected; Holding Steady on Our Fair Value Estimate

Edwards Lifesciences posted full-year results that landed very close to our projections with no big surprises. Our 2023 estimates remain bounded by management’s outlook, and we’re leaving our fair value estimate intact. The U.S. roll out of Pascal and impending read outs from several transcatheter mitral and tricuspid clinical studies have underscored this firm’s formidable ability to innovate, which lies at the heart of its narrow economic moat. Edwards has built up a culture that is focused on product superiority and excellence in operations that comprise some of the intangible assets that this firm benefits from. Considering the firm’s ability to dominate both surgical valves and transcatheter aortic valves and our confidence in the firm’s ongoing commitment to innovation (even with a management change on tap), we think Edwards has the elements to potentially reach wide moat status. However, the firm’s outsized reliance on heart valves is the key factor that has kept us from tipping the firm into wide moat territory.