Teleflex Incorporated (TFX - Get Rating) in Wayne, Pa., provides medical technology products. The company primarily designs, develops, manufactures, and supplies single-use medical devices used by hospitals and healthcare providers for common diagnostic and therapeutic procedures in critical care and surgical applications. It operates through the Americas, Europe, the Middle East and Africa (EMEA), Asia Pacific, and Original Equipment Manufacturer and Development Services segments.

TFX reported impressive fiscal fourth-quarter results, beating Wall Street estimates for sales and adjusted EPS by 1.6% and 1.9%, respectively.

However, the stock has declined 11.7% in price over the past nine months and 14.5% over the past year to close the last trading session at $354.83. Furthermore, it is currently trading 21% below its 52-week high of $449.38, which it hit on April 28, 2021.

Click here to checkout our Healthcare Sector Report for 2022

Here is what could influence TFX’s performance in the coming months:

Robust Financials

TFX’s net revenues increased 7.1% year-over-year to $761.91 million for the fourth quarter, ended Dec. 31, 2021. The company’s net income increased 68.2% year-over-year to $128.07 million. Also, its adjusted EPS from continuing operations came in at $3.60, representing a 10.8%  increase  year-over-year. In addition, TFX’s selling, general, and administrative expenses decreased 2.2% year-over-year to $227.58 million.

Favorable Analyst Estimates

For its fiscal year 2023, TFX’s EPS and revenue are expected to increase 10.6% and 6.1%, respectively, year-over-year to $15.49 and $3.08 billion. In addition, its EPS is expected to grow at 11% per annum over the next five years. Furthermore, Wall Street analysts expect the stock to hit $393.29 in the near term, indicating a potential 10.8% upside.

High Profitability

In terms of trailing-12-month EBIT margin, TFX’s 20.3% is significantly higher than the 0.96% industry average. And its 28.75% trailing-12-month EBITDA margin is 502.2% higher than the 4.77% industry average. Furthermore, the stock’s trailing-12-month ROCE, ROC, and ROA came in at 13.68%, 6.09%, and 7.06%, respectively, compared to negative industry averages.

POWR Ratings Show Promise

TFX has an overall B rating, which equates to a Buy in our POWR Ratings system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. TFX has a B grade for Growth. This is justified given its revenue and earnings growth over the past year.

TFX also has a B grade for Sentiment, which is consistent with its revenue and earnings growth estimates.

TFX is ranked #23  of 161 stocks in the D-rated Medical – Devices & Equipment industry. Click here to access TFX’s ratings for Value, Momentum, Stability, and Quality ratings.

Bottom Line

TFX possesses robust financials, higher than industry profitability, and positive revenue and earnings growth prospects. So, we think it could be wise to buy the dip in the stock.

How Does Teleflex Incorporated (TFX) Stack Up Against its Peers

TFX has an overall POWR Rating of B. One could also check out these other stocks within the Medical – Devices & Equipment industry with an A (Strong Buy) rating: FONAR Corporation (FONR), Natus Medical Incorporated (NTUS), and Smith & Nephew plc (SNN).

TFX shares were trading at $355.49 per share on Friday morning, up $0.66 (+0.19%). Year-to-date, TFX has gained 8.33%, versus a -4.37% rise in the benchmark S&P 500 index during the same period.

About the Author: Dipanjan Banchur

Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets. More...

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