Edwards Lifesciences Corporation (EW): A Bull Case Theory

Core Thesis - Edwards Lifesciences Corporation is experiencing a bullish sentiment driven by substantial institutional order flow and a strategic "Risk Reversal" trade, indicating confidence in a significant fundamental breakout in Q1 2026 [1][2]. Institutional Order Flow - The company has seen a notable institutional order flow, highlighted by a "Risk Reversal" trade involving the purchase of 2,600 March 20, 2026, $92.50 calls while selling 2,600 $82.50 puts, creating a near-zero-cost upside position [2][3]. Options Strategy - This options strategy takes advantage of the volatility skew, where downside puts are overpriced compared to upside calls, allowing the institutional trader to finance the call purchase by selling expensive puts [3]. Price Support - The $82.50 strike price serves as a calculated floor, positioned just below the 200-day moving average of $83.56, indicating confidence that institutional support will mitigate any near-term downside [3]. Upcoming Catalysts - The timing of the March expiration coincides with key events: the J.P. Morgan Healthcare Conference in January 2026, Q4 earnings and 2026 guidance in early February, and expected FDA approval of the SAPIEN M3 Transcatheter Mitral Valve Replacement system in Q1 2026 [4]. Market Opportunity - Regulatory approval of the SAPIEN M3 system could unlock a multibillion-dollar market opportunity, significantly enhancing the value of the $92.50 calls [5]. Growth Metrics - Edwards' Transcatheter Mitral and Tricuspid Therapies unit is experiencing robust growth at 57% year-over-year, supported by ongoing institutional accumulation and a $500 million accelerated share repurchase program [5]. Investment Outlook - The institutional positioning presents an asymmetric opportunity with high probability downside protection and substantial upside potential, suggesting a target price of $100 in Q1 2026 while defending the $82 level [6].