What’s Next For Teleflex Stock After Its Recent PTD Recall?

by Trefis Team
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[Updated: Nov 29, 2021] TFX Stock Update

The stock price of Teleflex (NYSE:TFX), best known for its single-use medical devices for common diagnostic and therapeutic procedures, has seen a decline of 12% over the last month, while it was down over 4% last week. The company recently announced a recall of its of Arrow-Trerotola Over-The-Wire Percutaneous Thrombolytic Device (PTD) 7FR – used for dialysis interventions – after reports indicating one of the parts can detach causing local ischemia. The U.S. FDA has classified the Arrow-Trerotola recall as a class 1 recall, implying that the use of the product will cause serious health consequences. [1]

Teleflex reported upbeat Q3 results last month, with revenue of $700 million and earnings of $3.51 on a per share basis, both above the consensus estimate of $698 million, and $3,03, respectively. The company also revised its full-year 2021 earnings outlook to $13.25 per share, compared to its prior guidance of  $13.00, at the mid-point of the provided range. While the Q3 beat and outlook for the full-year is positive, the company’s revenue growth is adversely impacted due to greater than anticipated headwinds from Covid-19. Now that reports of a new variant of the Covid-19 – Omicron – which has 32 mutations in the spike protein, the part of the virus that Covid-19 vaccines target, have surfaced, there are looming concerns for the near-term demand outlook.

Given that TFX stock has fallen 12% in a month, will it continue its downward trajectory, or is a rise imminent? Going by historical performance, there is a strong chance of a rise in TFX stock over the next month. Out of 54 instances in the last ten years that TFX stock saw a twenty-one day fall of 12% or more, 47 of them resulted in TFX stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 47 out of 54, or about an 87% chance of a rise in TFX stock over the coming month. See our analysis on Teleflex Stock Chances of Rise for more details.

So, if this follows historical patterns, TFX stock is likely to see higher levels. That said, the move in TFX stock will also depend on the trend in U.S. Covid-19 cases. If the Omicron results in another large spike in total number of Covid-19 cases, it is likely that TFX stock will actually see even lower levels, along with some of the other medical devices companies, as well. Wondering how Teleflex’s peers stack up? Check out Teleflex Stock Comparison With Peers to see how TFX stock compares against peers on metrics that matter. You can find more such useful comparisons on Peer Comparisons.

Calculation of ‘Event Probability‘ and ‘Chance of Rise‘ using last ten years data

  • After moving -4.3% or more over a five-day period, the stock rose in the next five days on 55% of the occasions.
  • After moving -10.3% or more over a ten-day period, the stock rose in the next ten days on 72% of the occasions
  • After moving -12.2% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 87% of the occasions.

Teleflex (TFX) Stock Return (Recent) Comparison With Peers

  • Five-Day Return: CRY highest at -3.4%; BSX lowest at -6.0%
  • Ten-Day Return: ROP highest at -2.5%; NARI lowest at -12.3%
  • Twenty-One Days Return: ROP highest at -2.3%; TFX lowest at -12.2%

 

[Updated: Jul 19, 2021] TFX Stock Decline

The stock price of Teleflex (NYSE:TFX), best known for its single-use medical devices for common diagnostic and therapeutic procedures, reached an all-time high of $440 in April this year before a recent sell-off, after the Centers for Medicare and Medicaid Services proposed new rules, including one that will result in a 20% cut in physician payments for UroLift – Teleflex’s system to treat enlarged prostate. While this new rule apply to procedures performed only in doctors’ offices, it will impact nearly one-third of UroLift’s total sales. [2] UroLift falls under the Interventional Urology segment reported in the company’s annual filings, and the segment accounted for 11% of Teleflex’s total sales in 2020.

After a 7% fall in a week, will TFX stock continue its downward trajectory over the coming weeks, or is a recovery in the stock imminent? According to the Trefis Machine Learning Engine, which identifies trends in the company’s stock price using ten years of historical data, returns for TFX stock average 6.5% in the next one-month (twenty-one trading days) period after experiencing a 7.2% drop over the previous week (five trading days).

But how would these numbers change if you are interested in holding TFX stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning Engine to test Teleflex stock chances of a rise after a fall. You can test the chance of recovery over different time intervals of a quarter, month, or even just 1 day!

MACHINE LEARNING ENGINE – try it yourself:

IF TFX stock moved by -5% over five trading days, THEN over the next twenty-one trading days TFX stock moves an average of 4.5%, with a good 75% probability of a positive return over this period.

Some Fun Scenarios, FAQs & Making Sense of Teleflex Stock Movements:

Question 1: Is the average return for Teleflex stock higher after a drop?

Answer: Consider two situations,

Case 1: Teleflex stock drops by -5% or more in a week

Case 2: Teleflex stock rises by 5% or more in a week

Is the average return for Teleflex stock higher over the subsequent month after Case 1 or Case 2?

TFX stock fares better after Case 1, with an average return of 4.5% over the next month (21 trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an average return of 1.5% for Case 2.

In comparison, the S&P 500 has an average return of 3.1% over the next 21 trading days under Case 1, and an average return of just 0.5% for Case 2 as detailed in our dashboard that details the average return for the S&P 500 after a fall or rise.

Try the Trefis machine learning engine above to see for yourself how Teleflex stock is likely to behave after any specific gain or loss over a period.

Question 2: Does patience pay?

Answer: If you buy and hold Teleflex stock, the expectation is over time the near-term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.

Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!

For TFX stock, the returns over the next N days after a -5% change over the last 5 trading days is detailed in the table below, along with the returns for the S&P500:

You can try the engine to see what this table looks like for Teleflex after a larger loss over the last week, month, or quarter.

Question 3: What about the average return after a rise if you wait for a while?

Answer: The average return after a rise is understandably lower than after a fall as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks – although TFX stock appears to be an exception to this general observation.

It’s pretty powerful to test the trend for yourself for Teleflex stock by changing the inputs in the charts above.

While TFX stock may rebound, 2020 has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is for Teleflex vs. Emergent Biosolutions.

What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio that’s beaten the market consistently since the end of 2016.

Returns Nov 2021
MTD [1]
2021
YTD [1]
2017-21
Total [2]
TFX Return -17% -26% 89%
S&P 500 Return 1% 22% 105%
Trefis MS Portfolio Return -3% 46% 297%

[1] Month-to-date and year-to-date as of 11/29/2021
[2] Cumulative total returns since 2017

Invest with Trefis Market-Beating Portfolios

See all Trefis Price Estimates

Notes:
  1. Teleflex Press Release, Nov 26, 2021 []
  2. Teleflex Falls on Proposed CMS Rules to Cut Doctor Reimbursements, The Street, Jul 15, 2021 []
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