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Here's Why You Should Hold on to Teleflex (TFX) Stock Now

Zacks Equity Research

Teleflex, Inc. TFX is currently in investors’ good books, courtesy of the recent NeoTract acquisition and strong business in Asia.

The company has outperformed its industry in the past six months. The stock has rallied 3.9% against the industry’s 3% fall.

The provider of medical technology products has a market cap of $15.18 billion. The company primarily designs, develops, manufactures as well as supplies single-use medical devices used by hospitals and healthcare providers for common diagnostic and therapeutic procedures in critical care and surgical applications.

Banking on solid prospects, this company has a Zacks Rank #3 (Hold) at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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NeoTract Inclusion a Plus: The acquisition of NeoTract has started to contribute to the top line.NeoTract’s FDA-cleared UroLift System is currently witnessing increased adoption in the United States. For the full year, this business is expected to register 35% growth.

 

Vascular Solution Synergy Continues: The acquisition of Vascular Solutions (in February 2017) has begun strengthening Teleflex’s vascular and interventional access product portfolios. In the second quarter, revenues from Vascular Access rose significantly on strength in Peripherally Inserted Central Catheters, Central Venous Catheter and EZ-IO Intraosseous Vascular Access System. This is also expected to keep contributing to the company’s top line through the year.

Favorable Study Outcome: In August 2019, the company announced favorable results from its SAFE MANTA IDE Clinical Trial, which demonstrated the safety and efficacy of the MANTA device. This marks a major step toward attaining FDA approval.

However, a few factors have been deterring the company’s growth lately.

Escalating Expenses: Teleflex’ selling, general and administrative as well as research and development expenses have been on the rise. Needless to say, this huge escalation in expenses is exerting pressure on margins.

Competitive Landscape Tough: Teleflex competes with companies, ranging from small start-up enterprises to larger and more established companies, who have access to significantly greater financial resources. Its major competitors include Medtronic and Becton, Dickinson and Company.

Which Way Are Estimates Treading?

For the third quarter of 2019, the Zacks Consensus Estimate for earnings is pegged at $2.76, which indicates 9.5% rise from the year-ago quarter’s figure. The same for revenues is pegged at $643.3 million, calling for year-over-year growth of 5.5% from the prior-year quarter’s number.

For 2019, the Zacks Consensus Estimate for earnings is pegged at $11, suggesting 11.4% year-over-year growth. The same for revenues is pegged at $2.60 billion, suggesting 6.2% rise from the prior-year quarter’s level.

Key Picks

A few better-ranked stocks in the broader medical space are Stryker SYK, Medtronic MDT and Hill-Rom Holdings HRC, each carrying a Zacks Rank #2 (Buy).

Stryker’s long-term earnings growth rate is expected to be 10.04%.

Medtronic’s long-term earnings growth rate is projected at 7.32%.

Hill-Rom Holdings’ long-term earnings growth rate is projected at 10.01%.

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Teleflex Incorporated (TFX) : Free Stock Analysis Report
 
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