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Teleflex Analyst Sees 'Sustainable Growth Profile' In Medical Device Manufacturer

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Teleflex Analyst Sees 'Sustainable Growth Profile' In Medical Device Manufacturer

Consensus expectations for Teleflex Incorporated (NYSE: TFX) imply an improvement in revenue growth from an estimated 6.5 percent in 2019 to 7.2 percent in 2020, according to Raymond James. 

New product traction and the potential commencement of UroLift sales in Japan could drive a further acceleration in revenue growth toward 7.5 percent or higher in 2020, the sell-side firm said Wednesday. 

The Analyst

Analyst Lawrence Keusch maintained a Strong Buy rating on Teleflex and raised the price target from $320 to $348.

The Thesis

New products like RePlas and Manta could play a key role in enabling the company to achieve multiyear growth, Keusch said in the Wednesday note. 

Raymond James' forecasts reflect around 6.5-percent constant-currency revenue growth for 2020 and 2021. This appears conservative, since new products could add an estimated $36 million in revenue, the analyst said. 

The Japanese market represents an opportunity of at least $2 billion for UroLift, Keusch said. It could be larger when patients who are being medically managed for enlarged prostate symptoms are taken into account, he said.

Even a 20-percent shift of male patients who are on medical therapy in Japan could add another $1.2 billion in UroLift sales, the analyst said. 

Even while raising the revenue growth estimate for 2020 from 6.7 percent to 6.9 percent, Keusch said that the figure still leaves room for upside.

“In addition, well-timed M&A could help maintain organic growth in 2021 and beyond, adding to the sustainable growth profile.”

Price Action

Teleflex shares were down 0.61 percent at $302.18 at the time of publication Wednesday. 

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Latest Ratings for TFX

DateFirmActionFromTo
Jan 2021KeyBancMaintainsOverweight
Jan 2021NeedhamMaintainsBuy
Dec 2020Morgan StanleyMaintainsOverweight

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