Teleflex (TFX) Hits A 52-Week High On NeoTract Acquisition

Shares of Teleflex Incorporated (NYSE:TFX) rallied to a new 52-week high of $248.68 on Oct 6, closing a tad lower at $246.05. This represents a strong return of approximately 16.4% over the last three months, better than the S&P 500’s 5.1% over the same time frame.

Teleflex designs, develops, manufactures, and supplies single-use medical devices for common diagnostic and therapeutic procedures in critical care and surgical applications worldwide. The company currently has a Zacks Rank #3 (Hold).

Year to date, the company’s share price has considerably outperformed the broader industry. The stock has rallied 52.7%, higher than the industry’s gain of just 21.1%. Notably, Teleflex has a market cap of $10.9 billion. Taking the stable performance of the stock into consideration, we expect Teleflex to scale higher in the coming quarters. The company’s long-term growth of 12.5% also holds promise.

Catalysts

Acquisition of NeoTract: In October, Teleflex completed the acquisition of NeoTract, Inc. Per the terms of the deal, Teleflex promised an upfront cash payment of $725 million to NeoTract (at deal closure). Furthermore, Teleflex has agreed to pay an additional $375 million by the end of 2020.

Per management, the buyout is expected to generate mid-single digit constant currency revenue growth over the next several years and also drive Teleflex’s margins.

Introduction of CleanSweep Technology: Teleflex recently introduced the CleanSweep Closed Suction System (CSS), an innovative closed suction catheter to boost its broad portfolio for Respiratory Care. The platform has been showcased at the 70th Anniversary of the American Association for Respiratory Care (AARC) Congress, in Indianapolis.

Per management, the CleanSweep platform provides enhanced secretion removal through a dual operation of balloon sweeping technology.

Focus on High Flow Nasal Cannula Therapy: High Flow Nasal Cannula Therapy (HFNCT) is a new standard of care for patients with acute hypoxemic respiratory failure. Teleflex has gained prominence in AARC Congress with the introduction of its highly exclusive suite of HFNCT solution as well.

Estimate Revision Trend Solid: The estimate revision trend for Teleflex is favorable at the moment. For the full year, seven analysts moved north compared to no movement in the opposite direction over the last two months. As a result, full-year estimates inched up 0.1% to $8.29 per share.

For the current quarter, three analysts moved north, compared to two movements in the opposite direction in the last two months. The Zacks Consensus Estimate for current-quarter earnings rose 0.5% to $2.02 per share over the same time frame.

Teleflex Incorporated Price and Consensus

Teleflex Incorporated Price and Consensus | Teleflex Incorporated Quote

Key Picks

A few better-ranked stocks in the broader medical sector are SONOVA HOLDING (OTC:SONVY) , IDEXX Laboratories, Inc. (NASDAQ:IDXX) and Luminex Corporation (NASDAQ:LMNX) . SONOVA and Luminex sport a Zacks Rank #1 (Strong Buy), while IDEXX Laboratories has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

SONOVA represented a solid return of 35% over the last year. The company has a long-term expected earnings growth rate of 7%.

IDEXX Laboratories has an average earnings beat of 9.3% over the trailing four quarters. It has a long-term expected earnings growth rate of 19.8%.

Luminex came up with a positive earnings surprise of 188.9% in the last quarter. The stock has a long-term expected earnings growth rate of 16.3%.

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