Core Viewpoint - Investors in the Medical - Instruments sector should consider Teleflex (TFX) and SONOVA HOLDING (SONVY) for potential value opportunities, with TFX currently showing stronger value metrics and earnings outlook than SONVY [1][3]. Valuation Metrics - TFX has a forward P/E ratio of 8.86, significantly lower than SONVY's forward P/E of 22.79, indicating TFX may be undervalued [5]. - The PEG ratio for TFX is 1.74, while SONVY's PEG ratio is 2.23, suggesting TFX has a more favorable growth outlook relative to its valuation [5]. - TFX's P/B ratio stands at 1.3, compared to SONVY's P/B of 5.61, further highlighting TFX's superior valuation metrics [6]. Earnings Outlook - TFX holds a Zacks Rank of 1 (Strong Buy), indicating a positive earnings estimate revision trend, while SONVY has a Zacks Rank of 4 (Sell), suggesting a weaker earnings outlook [3]. - The solid earnings outlook for TFX contributes to its overall Value grade of B, while SONVY has a Value grade of C, reinforcing TFX's position as the better value option [6].

Company Overview - Teleflex Incorporated (TFX) has launched the Barrigel rectal spacer in Japan, following regulatory approval and insurance coverage acceptance, marking a significant step in its global expansion strategy [1][8] - The Barrigel rectal spacer is the first hyaluronic rectal spacer designed to protect the rectum during radiation therapy for prostate cancer, made from Non-Animal Stabilized Hyaluronic Acid [4][5] Financial Performance - Following the Barrigel launch announcement, Teleflex's shares increased by 3.7%, closing at $124.30 [2][8] - Teleflex has a market capitalization of $5.55 billion and an earnings yield of 11.3%, which is favorable compared to the industry's -5.2% [3] Product Efficacy - A clinical study in the U.S. showed that 98% of men treated with the Barrigel rectal spacer achieved at least a 25% reduction in radiation exposure to the rectum, with an average reduction of 85% in rectal V54 Gy radiation [6] Industry Prospects - Japan's prostate cancer diagnostics market generated revenues of $345.5 million in 2023 and is projected to reach $438.0 million by 2030, with a CAGR of 3.4% from 2024 to 2030 [9] - Prostate cancer was the most common cancer among men in Japan in 2022, accounting for 18% of all cancer diagnoses [9] Recent Developments - Teleflex completed the acquisition of the majority of BIOTRONIK SE & Co. KG's Vascular Intervention business for €760 million, enhancing its interventional access product line and global presence [10]

Core Viewpoint - The healthcare sector is showing initial signs of recovery after reaching a 30-year high in valuation discount relative to the S&P 500 index [1][2] Group 1: Market Performance - Since reaching a historical high on September 3, 2024, healthcare stocks have been in a "persistent downtrend," underperforming both in absolute terms and relative to the S&P 500 [1] - August is identified as a turning point for the sector, with healthcare stocks beginning to reverse their previous weak performance [1] Group 2: Economic Environment - The recovery is driven by a historically significant valuation gap and an economic backdrop characterized by GDP growth slowing to 1.5% or lower while inflation remains at 3% or higher, which historically favors the healthcare sector [1] - The dual effect of valuation discount and improved sentiment provides strong justification for including healthcare stocks in investment portfolios under the current economic conditions [2] Group 3: Investment Recommendations - Evercore ISI highlights several healthcare stocks with attractive valuations and sentiment, including Cencora (COR.US), BioMarin Pharmaceutical (BMRN.US), Cigna (CI.US), Cardinal Health (CAH.US), Humana (HUM.US), Incyte (INCY.US), LabCorp (LH.US), Pfizer (PFE.US), Quest Diagnostics (DGX.US), Teleflex (TFX.US), Tenet Healthcare (THC.US), Universal Health Services (UHS.US), and Viatris (VTRS.US) [2]

Group 1 - The healthcare sector is showing initial signs of recovery after reaching a 30-year high in valuation discount relative to the S&P 500 index [1][2] - Healthcare stocks have been in a "persistent downtrend" since reaching historical highs on September 3, 2024, missing out on market rebounds [1] - The recovery is driven by a historical valuation gap and a macroeconomic environment characterized by GDP growth slowing to 1.5% or lower while inflation remains at 3% or higher, which historically favors healthcare sector performance [1] Group 2 - The current price-to-earnings ratio of the overall market is 25.5 times, while healthcare stocks still present attractive investment options [2] - The potential recovery of healthcare stocks is described as part of "the fastest bear market rebound in history," indicating a larger bull market may extend until 2026 [2] - Evercore ISI recommends healthcare stocks with both valuation and sentiment appeal, including Cencora, BioMarin Pharmaceutical, Cigna, Cardinal Health, Humana, Incyte, Labcorp, Pfizer, Quest Diagnostics, Teleflex, Tenet Healthcare, Universal Health Services, and Viatris [2]

Core Insights - Teleflex Incorporated has launched Barrigel™ rectal spacer in Japan, following regulatory approval and insurance coverage acceptance, marking a significant step in its global expansion strategy [3][5][11] - Barrigel™ is the first and only sculptable non-animal stabilized hyaluronic acid (NASHA) rectal spacer, designed to reduce radiation exposure to the rectum during prostate cancer treatment [4][9] - In 2022, prostate cancer was the most common cancer among men in Japan, with 104,318 new cases, representing 18% of all cancer diagnoses nationwide [5] Product Details - Barrigel™ rectal spacer has demonstrated a 98% success rate in achieving at least a 25% reduction in radiation to the rectum in a U.S. clinical study, with an average reduction of 85% in rectal V54 Gy radiation [6] - The product is indicated for prostate cancer patients with T1-T3b disease and is cleared for use in the U.S., Australia, Europe, and Japan [11][12] - Barrigel™ is made from biodegradable NASHA, which is biocompatible and fully absorbable, ensuring safety and efficacy in various medical applications [10][12] Market Impact - The launch in Japan is expected to enhance access to Barrigel™ for men undergoing prostate cancer radiation therapy, minimizing rectal side effects [7] - Teleflex aims to establish Barrigel™ as the standard of care for prostate cancer radiation therapy, emphasizing its innovative technology and precision in placement [5][8] - Training for healthcare professionals in Japan has commenced, led by top radiation oncologists, to ensure effective implementation of the product [8]

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today. One company value investors might notice is Teleflex (TFX) . TFX is currently holding a Zacks Rank #2 (Buy) and a Value grade of A. While the proven Zacks Rank places an emphasis on earni ...

Company Overview - Teleflex Incorporated held its Q2 2025 Earnings Conference Call on July 31, 2025, at 8:00 AM ET [1] - Key participants included Liam Kelly (Chairman, President & CEO) and John Deren (Executive VP & CFO) [4] Conference Call Details - The call was recorded and will be available for replay on the company's website [2] - A press release and accompanying slides were made available on the company's website prior to the call [3] Forward-Looking Statements - The company indicated that some discussions during the call would contain forward-looking statements [4]

Financial Data and Key Metrics Changes - Second quarter revenues were $780.9 million, an increase of 4.2% year over year on a GAAP basis and up 1% on an adjusted constant currency basis [5][6] - Adjusted earnings per share were $3.73, a 9.1% increase year over year [6][25] - Adjusted gross margin was 59.7%, a 110 basis point decrease year over year, primarily due to cost inflation and unfavorable product mix [24] - Adjusted operating margin was 26.9%, a 20 basis point year over year increase [24] Business Line Data and Key Metrics Changes - Vascular Access revenue increased 1.4% year over year to $185.5 million, driven by growth in PICCs [9] - Interventional revenue was $170 million, an increase of 19.3% year over year, led by intra aortic balloon pumps and complex catheters [9] - Anesthesia revenues decreased 7.6% year over year to $96.4 million, impacted by tough comps in military orders [10] - Surgical business revenue increased 1.4% year over year to $114 million, with solid underlying trends [10] - Interventional Urology revenue decreased 8.3% year over year to $76.4 million, with pressure on UroLift [11] Market Data and Key Metrics Changes - Americas revenues were $525.7 million, a 2% increase year over year [7] - EMEA revenues decreased 2.1% year over year to $166.2 million, with strength in Interventional business offset by Anesthesia challenges [7] - Asia revenues were $89 million, a 1.2% increase year over year, driven by Southeast Asia, India, and Japan [8] Company Strategy and Development Direction - The company is progressing with the separation announced in February, aiming for focused strategic direction and streamlined operations [12][13] - A potential sale of NewCo is being pursued, with significant interest from potential buyers [13] - The acquisition of BioTronic's vascular intervention business is expected to enhance growth and improve margins, with anticipated annual revenues exceeding $800 million [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in operational excellence and value creation, with updated financial guidance reflecting strong performance [5][28] - The company expects total constant currency growth for 2025 to be in the range of 7.7% to 8.7% [28] - Management highlighted the positive impact of proposed CMS reimbursement changes on UroLift and Barajel, which could enhance growth prospects [72][73] Other Important Information - The company completed the acquisition of BioTronic for a net initial cash payment of €4 million [15] - The impact from tariffs is now estimated at approximately $29 million for 2025, a reduction from previous estimates [30] - The company plans to initiate a U.S. pivotal study for PRESOLVE technology in the coming months [19] Q&A Session Summary Question: Can you provide more context on the guidance bridge between tariffs, FX, and business outperformance? - Management expects organic growth of the BioTronic business in the second half of the year to be mid single digits, with a long-term growth expectation of 6% or better starting in 2026 [40][41] Question: Can you provide a rough breakout between the growth of remainco and newco? - Remainco is expected to grow in the upper 5% range, while newco's growth is anticipated to be in the mid single digits [45] Question: What is the outlook for the interventional business growth? - The interventional business is expected to grow high single to low double digits for the full year of 2025 [46] Question: Can you provide an update on the timing for the sale versus spin of NewCo? - If a spin proceeds, it is expected to occur in mid-2026, while the timing for a sale remains uncertain [50][81] Question: How will the proposed CMS rule impact UroLift? - The proposed rule is expected to provide a 10% uplift in reimbursement, which could significantly benefit UroLift's growth [72][84] Question: What is the site of service mix for Barajel? - The site of service mix for Barajel is spread across all three service sites, with the proposed uplift expected to encourage more product movement to the office side [87]

Financial Data and Key Metrics Changes - Second quarter revenues were $780.9 million, an increase of 4.2% year over year on a GAAP basis and up 1% on an adjusted constant currency basis, exceeding previous guidance of $769 million to $777 million [5][6] - Adjusted earnings per share were $3.73, a 9.1% increase year over year [6][25] - Adjusted gross margin was 59.7%, a decrease of 110 basis points year over year, primarily due to cost inflation and unfavorable product mix [23][24] - Adjusted operating margin was 26.9%, a 20 basis point year over year increase [23][24] Business Line Data and Key Metrics Changes - Americas revenues were $525.7 million, a 2% increase year over year, driven by intra-aortic balloon pumps [7] - EMEA revenues decreased 2.1% year over year to $166.2 million, with strength in Interventional business offset by challenges in Anesthesia [7] - Asia revenues were $89 million, a 1.2% increase year over year, driven by Southeast Asia, India, and Japan [8] - Vascular Access revenue increased 1.4% year over year to $185.5 million, led by growth in PICCs [9] - Interventional revenue was $170 million, a 19.3% increase year over year, driven by intra-aortic balloon pumps and complex catheters [9] - Anesthesia revenues decreased 7.6% year over year to $96.4 million, primarily due to tough comps in military orders [10] - Surgical business revenue increased 1.4% year over year to $114 million, with solid underlying trends [10] Market Data and Key Metrics Changes - The company expects continued revenue improvement in China through the remainder of 2025, despite previously announced volume-based procurement dynamics [8] - The acquisition of the Vascular Intervention business is expected to generate over $800 million in annual revenues [15] Company Strategy and Development Direction - The company is progressing with the separation announced in February, aiming for focused strategic direction and streamlined operations [12][36] - A potential sale of NewCo is being pursued, with significant interest from potential buyers [13][36] - The acquisition of BioTronic's vascular intervention business is a key part of the value creation strategy, expected to enhance global presence and improve patient care [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about operational excellence and value creation, with updated financial guidance reflecting strong performance [5][36] - The company anticipates total constant currency growth for 2025 to be in the range of 7.7% to 8.7%, significantly higher than previous guidance [27][28] - Management highlighted the positive impact of proposed reimbursement changes from CMS on UroLift and Baragel, which could enhance growth prospects [71][72] Other Important Information - Cash flow from operations for the first half of 2025 was $81.2 million, a decrease from $204.5 million in the prior period, primarily due to unfavorable changes in working capital [26] - The company expects a tariff impact of approximately $29 million in 2025, a reduction from previous estimates [30] Q&A Session Summary Question: Can you provide more context on the guidance bridge between tariffs, FX, and business outperformance? - Management indicated that the organic growth expectation for the Biotronic business is mid-single digits for the second half of the year, with overall operational performance contributing positively to EPS [40][41] Question: What is the growth outlook for remainco and newco? - Remainco is expected to grow in the upper 5% range, while newco's interventional business is anticipated to grow high single to low double digits for the full year of 2025 [44][46] Question: Can you discuss the timing and decision-making process for NewCo? - The timing for a potential spin-off is still mid-2026, with ongoing due diligence and interest from potential buyers [50][81] Question: How will the proposed CMS rule impact UroLift? - The proposed rule is expected to provide a 10% uplift in reimbursement for UroLift, which could significantly enhance growth prospects [71][84] Question: What are the expectations for the integration of the BioTronic salesforce? - The integration is expected to leverage existing channels, with significant opportunities for revenue synergies due to the combined sales force [94][95]

Group 1: Earnings Performance - Teleflex reported quarterly earnings of $3.73 per share, exceeding the Zacks Consensus Estimate of $3.36 per share, and up from $3.42 per share a year ago, representing an earnings surprise of +11.01% [1] - The company posted revenues of $780.89 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.27%, compared to year-ago revenues of $749.69 million [2] Group 2: Stock Performance and Outlook - Teleflex shares have declined approximately 36% since the beginning of the year, contrasting with the S&P 500's gain of 8.2% [3] - The current consensus EPS estimate for the upcoming quarter is $3.36 on revenues of $791.97 million, and for the current fiscal year, it is $13.36 on revenues of $3.11 billion [7] Group 3: Industry Context - The Medical - Instruments industry, to which Teleflex belongs, is currently ranked in the bottom 40% of over 250 Zacks industries, indicating potential underperformance compared to higher-ranked industries [8]