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Teleflex On Accelerating Top-Line Growth Trajectory; Upgrading To Outperform

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Teleflex On Accelerating Top-Line Growth Trajectory; Upgrading To Outperform

Leerink Swann said in a note released on Thursday that it is increasingly confident in Teleflex Incorporated (NYSE: TFX)'s revenue growth acceleration trajectory. The firm attributed its increased confidence to the acquisition of Neotract the company announced on Sept. 5.

Accordingly, the firm upgraded its rating on the shares of Teleflex to Outperform and increased its price target from $227 to $266.

Analysts Richard Newitter and Ravi Misra said they now see a clearer pathway toward mid-single digit to high-single digit organic sales growth, with 6–7 percent, plus, organic sales growth expected by 2019 once both the Vascular Solutions, Inc. and Neotract deals turn organic.

See also: Spicing Up The Health Care Trade

Specifically, the analysts expect both the deals to add 2–3 percent to Teleflex's current 4–5 percent 2017 organic growth.

Leerink Swann noted that the company is good at executing on M&A integration, as it is into the habit of under-promising and over-delivering on initial synergy/sales target. The firm expressed excitement about the top-line acceleration's potential to transform the company into a high-single digit revenue grower in the out years.

Given that the company has guided to slight earnings per share dilution in 2017 and earnings per share neutrality in 2018 but gross and operating margin accretion, the firm said it sees at least 40 cents earnings per share accretion to its 2019 stand-alone earnings per share estimate of $10.75 for Teleflex or a pro-forma earnings per share estimate of $11.10.

Related Link: 2 Names Barclays Is Now Bearish On In Biotech
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Image Credit: By Boris7 (Own work) [CC BY-SA 4.0 (http://creativecommons.org/licenses/by-sa/4.0)], via Wikimedia Commons

Latest Ratings for TFX

DateFirmActionFromTo
Feb 2020BarclaysMaintainsEqual-Weight
Feb 2020UBSMaintainsBuy
Feb 2020Raymond JamesMaintainsStrong Buy

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