Teleflex downgraded at Wolfe on valuation concerns
Wolterk
- Teleflex Incorporated (NYSE:TFX) fell in the morning hours Wednesday after Wolfe Research downgraded the medical device maker to Peer Perform from Outperform, citing a thin margin safety due to its premium valuation.
- The analyst Mike Polark argues that in terms of 2023 and 2024 earnings per share, TFX trades at a ~10% premium to the S&P 500, assuming a ~$270 per share price and P/E multiples of 20x and 18x for 2023 and 2024, respectively.
- Citing the need for a positive EPS trend for returns, Polark is unwilling to raise TFX valuation further for the short term.
- The analyst projects a 2024 – 2025 timeframe for a potential “material EPS expansion” and argues that “thus a bit of patience required for the profit to inflect and therefore catalyze valuation.”