Teleflex's TFX robust performance in the Interventional product line is poised to help it grow in the upcoming quarters. The Urolift system is seeing consistent growth in hospitals, with positive trial results further enhancing its market position for benign prostatic hyperplasia (BPH) treatment. The densely populated markets in Asia also present a promising opportunity for growth. However, the impact of macroeconomic challenges and currency fluctuations remains concerning for the company.
In the past year, this Zacks Rank #2 (Buy) stock has risen 15.7% compared to 18.7% and 27.5% growth of the industry and the S&P 500 composite, respectively.
The global provider of med-tech products has a market capitalization of $11.38 billion. The company has an earnings yield of 5.79% compared to the industry’s -5.27%. Teleflex surpassed estimates in each of the trailing four quarters, delivering an average earnings surprise of 5.56%.
Let’s delve deeper.
Tailwinds for TFX
Strong Momentum in Interventional Unit: Teleflex’s wide range of Interventional products has generated robust revenues in the second quarter of 2024, including contributions from growth drivers such as MANTA, complex catheters, right heart catheters and intra-aortic balloon pumps. Earlier in April 2024, the company introduced the Wattson Temporary Pacing Guidewire through a limited market release, aiming to address the gaps in existing technologies and simplify minimalist transcatheter aortic valve replacement and other structural procedures.
Moreover, Teleflex’s Ringer Perfusion Balloon Catheter, which incorporates a unique balloon design that allows blood to flow through a vessel while the balloon is inflated, secured the FDA’s 510(k) clearance in July. The company will initially launch this with a PTCA indication and will explore label expansion after the completion of the vessel perforation trial.
Strong Outlook for Urolift: The company’s high-growth portfolio in its Interventional Urology unit is designed to treat lower urinary tract symptoms caused by BPH. Teleflex has broadened its reach by commercializing in Japan and China and launching the UroLift 2 System and the UroLift ATC Advanced Tissue Control System in the United States. In the hospital setting, Urolift has delivered consistent growth.
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Recent findings from two new head-to-head randomized controlled trials established the superiority of the system compared to the Rezum procedure and revealed its advantages over traditional medical therapies for early BPH intervention.
Business in Asia Holds Long-Term Potential: Observing strong demand for the company’s wide product line in emerging economies, Teleflex is currently focusing on expansion in densely populated geographies like Asia. The company has a solid market base for its Interventional Access and Anesthesia products in this region. Despite a softer performance in South Korea, revenues still increased 4% compared to the last year. While the challenges from the ongoing doctors’ strike are likely to persist throughout the year, the impact is expected to lessen. Asia is projected to be a significant driver of Teleflex’s growth, with an expected increase of 10% in 2024.
Factors Weighing on TFX
Macroeconomic Challenges: The company has been facing substantial cost pressures due to global macroeconomic factors, particularly in materials and services. TFX has been closely monitoring the impacts of rising interest rates and the ongoing geopolitical conflicts on its operations. If these tensions further escalate, this could potentially have a broader impact on other markets where Teleflex operates, affecting its supply chain, business partners or customers in those regions.
Adverse Foreign Exchange Translation Impacts: Foreign exchange is a major headwind for Teleflex due to a considerable percentage of its revenues coming from outside of the United States. The strengthening of the Euro and some other developed market currencies has been constantly hampering the company’s performance in the international markets.
TFX Stock Estimate Trend
The Zacks Consensus Estimate for TFX’s 2024 earnings per share (EPS) has moved up 0.1% to $13.97 in the past 30 days.
The Zacks Consensus Estimate for the company’s 2024 revenues is pegged at $3.10 billion, suggesting a 4.1% rise from the year-ago reported number.
Other Top MedTech Picks
Some other top-ranked stocks in the broader medical space are TransMedix Group TMDX, AxoGen AXGN and Boston Scientific BSX. While TransMedix Group currently sports a Zacks Rank #1 (Strong Buy), AxoGen and Boston Scientific each have a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
TransMedix Group’s earnings are expected to surge 259.7% in 2024. Its shares have gained 171.3% compared with the industry’s 18.7% growth in the past year. TMDX’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 287.5%.
AxoGen has an estimated 2024 earnings growth rate of 94.1% compared with the industry’s 12.8%. Shares of the company have gained 180% compared with the industry’s 18.8% growth in the past year. AXGN’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 96.5%.
Boston Scientific has an estimated earnings growth rate of 17.1% compared with the industry’s 14.9%. Shares of the company have gained 52.6% compared with the industry’s 19% growth in the past year. BSX’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 7.2%.
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