Teleflex Q3 Earnings: Can NYSE:TFX Hit Its $2.24 EPS Target?

in EARNINGS/INVESTING IDEAS by

Teleflex Incorporated (NYSE:TFX) is scheduled to report Q3 earnings results before markets open for trading on October 29, 2020.

The company is expected to report earnings of $2.24/share on revenue of $618.2 million. The consensus earnings per share (EPS) of $2.24/share is based on a poll of 11 analysts and represents a decline in eps of −24.7% over the same quarter last year, when the company reported earnings of $2.97/share.

The revenue forecast of $618.2 million based on a poll of 11 analysts implies a year-over-year (YoY) decline in revenue of −4.6%. Last year the company reported $648.3 million in revenue for the quarter.

Expected to report EPS contraction of −24.7% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $618.18 $648.32 −4.6%
EPS $2.24 $2.97 −24.7%

Earnings Call Trends

Management has been great at managing analyst expectations historically. The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance.

What are your expectations from Teleflex Incorporated for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $1.25 $1.93 53.8% Beat
Q1, 2020 $2.24 $2.72 21.7% Beat
Q4, 2019 $3.22 $3.28 2.0% Beat
Q3, 2019 $2.75 $2.97 8.1% Beat
Q2, 2019 $2.59 $2.66 2.6% Beat
Q1, 2019 $2.17 $2.24 3.3% Beat
Q4, 2018 $2.76 $2.77 0.4% Beat
Q3, 2018 $2.42 $2.52 4.3% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 28, 2020, the stock price reacted by falling −7.0%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 30, 2020 $400.99 $373.10 −7.0% Decline
April 30, 2020 $353.13 $329.37 −6.7% Decline
February 20, 2020 $395.14 $370.40 −6.3% Decline
October 31, 2019 $329.84 $346 4.9% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.49, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.49 implies a 0.6% chance of earnings manipulation.

Fundamentals And Technical Analysis

Teleflex Incorporated is currently trading at $357.36/share, down −2.4% for the day. The company is trading at approximately 87.3% of its 52-week high of $409.27/share. The company’s stock price is down −4.2% since the last earnings report and down −1.2% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 46.38 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:TFX Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 34.68 and a forward P/E multiple of 35.42.

Teleflex Incorporated’s current share price also implies a price-to-book (P/B) multiple of 5.37. The following table summarizes some other key fundamental ratios:

Data as of October 27, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 28, 2020
Stock Price (Current) $357.36
P/E Ratio 34.7x
P/E Ratio (Fwd) 35.4x
PEG Ratio 0.5
Total Debt / Total Capital 12.8%
Levered Free Cash Flow $327.5 million
EV / EBITDA 27.2x

Finbox

Teleflex Incorporated is a large-cap stock with a market capitalization of $16.623 billion and a total enterprise value of $18.551 billion. The company operates in the Healthcare sector and the Healthcare Equipment & Supplies industry.

Teleflex Incorporated designs, develops, manufactures, and supplies single-use medical devices for common diagnostic and therapeutic procedures in critical care and surgical applications worldwide. It provides vascular access products that comprise Arrow branded catheters and related devices, including catheter positioning systems for use in the administration of intravenous therapies, the measurement of blood pressure, and the withdrawal of blood samples through a single puncture site. The company also offers interventional products consist of various coronary catheters, structural heart therapies, and peripheral intervention and cardiac assist products that are used by interventional cardiologists and radiologists, and vascular surgeons; and Arrow branded catheters, Guideline and Trapliner catheters, the Manta Vascular Closure, and Arrow Oncontrol devices. It provides anesthesia products, such as airway and pain management products to support hospital, emergency medicine, and military channels; and surgical products, including metal and polymer ligation clips, and fascial closure surgical systems that are used in laparoscopic surgical procedures, percutaneous surgical systems, and other surgical instruments. The company also offers interventional urology product comprises the UroLift System, an invasive technology for treating lower urinary tract symptoms due to benign prostatic hyperplasia; and respiratory products, including oxygen and aerosol therapies, spirometry, and ventilation management products for use in various care settings. It provides urology products, such as catheters, urine collectors, and catheterization accessories and products for operative endourology; and bladder management for patients in the hospital and individuals in the home care markets. The company serves hospitals and healthcare providers, medical device manufacturers, and home care markets. The company was founded in 1943 and is headquartered in Wayne, Pennsylvania.

Expertise: financial technology, analyzing market trends. Brian is a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to research stock fundamentals. Brian’s background is in physics & computer science and previously worked as a software engineer at GE Healthcare. He enjoys applying his expertise in technology to help find market trends that impact investors. Brian can be reached at brian@finbox.io or at +1 (516) 778-6257.

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