We expect medical device maker
Edwards Lifesciences Corp
) to beat expectations when it reports second-quarter 2013
results on Jul 25.
Why a Likely Positive Surprise?
Our proven model shows that Edwards is likely to beat earnings
because it has the right combination of two key
Positive Zacks ESP
: Expected Surprise Prediction or ESP (Read:
Zacks Earnings ESP: A Better Method
), which represents the difference between the Most Accurate
Estimate and the Zacks Consensus Estimate, is at +1.32%. This is
very meaningful and a leading indicator of a likely positive
earnings surprise for shares.
Zacks Rank #2 (Buy)
: Edwards currently carries a Zacks Rank #2 (Buy). Note that
stocks with Zacks Ranks of #1, #2 and #3 have a significantly
higher chance of beating earnings. The sell rated stocks (#4 and
#5) should never be considered going into an earnings
The combination of Edwards' Zacks Rank #2 (Buy) and ESP of
+1.32% makes us very confident in looking for a positive earnings
beat on Jul 25.
What is Driving the Better-Than-Expected
Of late, the flow of good news for this medical device maker
remains uninterrupted. Earlier this month, Edwards won a patent
infringement case over medical devices major
). As per the German District Court of Mannheim, Medtronic's
CoreValve and CoreValve Evolut violate Edwards' Spenser patent
for transcatheter heart valve technology. This ruling will force
Medtronic to recall and discontinue the sale of its products in
Germany. Notably, Medtronic's CoreValve is a close competitor for
Edwards in Europe.
Furthermore, Edwards continues to focus on pipeline expansion
with a keen eye on high growth markets. In June, the company
gained Japanese regulatory clearance for its Sapien XT valve
making it the foremost commercially available transcatheter
aortic heart valve in the country. It is also working to gain
reimbursement approval for Sapien XT in Japan by the end of
Edwards is also working on Cohort A and Cohort B trials for
Sapien XT in the U.S. Moreover, the company's stellar pipeline
visibility is encouraging. We believe that the transcatheter
aortic valves offer the most promising opportunity in the cardiac
device space for Edwards.
Other Stocks to Consider
Edwards is not the only firm looking up this earnings season.
We also see likely earnings beats coming from these 2 industry
Sarepta Therapeutics Inc.
), Earnings ESP of +27.78% and Zacks Rank #1 (Strong Buy)
), Earnings ESP of +1.61% and Zacks Rank #1 (Strong Buy)
EDWARDS LIFESCI (EW): Free Stock Analysis
MEDTRONIC (MDT): Free Stock Analysis Report
RESMED INC (RMD): Free Stock Analysis Report
SAREPTA THERAP (SRPT): Free Stock Analysis
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