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Valued at a market cap of $8.9 billion, Teleflex Incorporated (TFX) is a global medical technology company that designs, develops, manufactures, and supplies single-use medical devices for diagnostic and therapeutic procedures in critical care and surgical applications. Based in Wayne, Pennsylvania, the company serves hospitals, healthcare providers, and home care markets worldwide.
Shares of the medical equipment maker have underperformed the broader market over the past 52 weeks. TFX has decreased 13.2% over this time frame, while the broader S&P 500 Index ($SPX) has gained 32.1%. In 2024, TFX stock declined 23.4%, compared to SPX's 26.2% YTD gain.
Looking closer, TFX stock has also lagged behind the Health Care Select Sector SPDR Fund's (XLV) 11.5% rise over the past 52 weeks and a 7.2% increase on a YTD basis.
Despite reporting better-than-expected Q3 adjusted EPS of $3.49, shares of Teleflex tumbled 14.5% on Oct. 31 because net revenues of $764.4 million missed the consensus estimate. The revenue shortfall was driven by challenges in the OEM segment, including a major customer vertically integrating a key product and impacts from customers' inventory management. Furthermore, management lowered its 2024 revenue growth guidance to 2.9%-3.4%, raising investor concerns.
For the current fiscal year, ending in December, analysts expect TFX's EPS to grow 3.4% year-over-year to $13.98. The company's earnings surprise history is promising. It beat the consensus estimates in the last four quarters.
Among the 13 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on three “Strong Buy” ratings, three “Moderate Buys,” and seven “Holds.”
This configuration is slightly less bullish than three months ago, with four “Strong Buy” ratings on the stock.
On Nov. 4, Truist lowered its price target on Teleflex to $227, maintaining a “Hold" rating due to a revenue miss and downward guidance, despite a strong Q3 earnings report. The revenue shortfall was attributed to a major customer vertically integrating product and inventory management issues, though the analyst believes the stock's post-earnings selloff was overdone.
As of writing, TFX is trading below the mean price target of $248.64. The Street-high price target of $285, implies a modest potential upside of 49.2% from the current price levels.
