Teleflex Hits New 52-Week High: What's Driving the Rally?

Shares of Teleflex Incorporated TFX reached a new 52-week high of $376.54 on Dec 31, closing the session marginally lower at $376.44. The stock has rallied 8.5% since its third-quarter earnings announcement on Oct 31.

The company’s strong third-quarter earnings results, backed by robust segmental and global revenue growth, prompted the rally.

Let us delve deeper.


Q3 Performance

Teleflex exited the third quarter on a strong note, with better-than-expected earnings and revenue numbers. It witnessed year-over-year improvements in revenues in all of its segments as well as across Europe, Middle East and Africa (EMEA). It witnessed robust growth in Asia, OEM and Americas as well.

Teleflex is upbeat about continuing the recent trend in the EMEA and the Asia Pacific, backed by robust improvement in revenues on balanced growth across the majority of segments and all geographies. The continued UroLift momentum in the third quarter is impressive. The expansion of gross margin also buoys optimism. A raised revenue guidance, on a constant-currency basis, is an added positive.

Other Growth Drivers

Inclusion of NeoTract: Of late, Teleflex is upbeat about the robust performance of NeoTract, its acquired business. In the third quarter, the Interventional Urology business witnessed impressive growth on NeoTract’s continued strong momentum. Investors are also optimistic about the continued market adoption of the FDA-approved UroLift System. Teleflex is also working toward a limited launch of UroLift in mid to late 2020 in Japan, after it received the Shonin approval.

Vascular Solution Synergy: Investors are optimistic about accelerating growth of the company’s vascular and interventional access product portfolios. Vascular Solutions, acquired in February 2017, has been instrumental in expanding Teleflex’s outreach in the coronary and peripheral vascular market. It has also been generating increased cross-portfolio selling opportunities for the company.

Business in Asia: Investors are upbeat about Teleflex’s increasing focus on its expansion in geographies like Asia, which has been significantly contributing to the company’s top line. Notably, the company’s expansion in China is worth mentioning in this context. In the third quarter, its Asia unit reported year-over-year growth on strong rollout of its Vascular and Surgical products.

Zacks Rank & Key Picks

Currently, Teleflex carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the broader medical space are Haemonetics Corporation HAE, National Vision Holdings, Inc EYE and Medtronic plc MDT.

Haemonetics currently flaunts a Zacks Rank #1 (Strong Buy) and has a projected long-term earnings growth rate of 13.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.

National Vision’s long-term earnings growth rate is estimated at 17.8%. The company currently carries a Zacks Rank #2 (Buy).

Medtronic’s long-term earnings growth rate is estimated at 7.4%. It currently carries a Zacks Rank #2.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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