Teleflex Stock Plunges as Split Plan and Mixed Q4 Earnings Disappoint Investors

Teleflex Incorporated (NYSE: TFX) shares tumbled to a 52-week low on Thursday after the medical-technology company posted disappointing financial guidance and unveiled plans to split into two publicly traded companies. The stock was down 21.6% at $139.35 at the last check Thursday, after touching a 52-week low of $137 earlier in the session.

Teleflex said it has agreed to acquire the Vascular Intervention business of Germany's Biotronik SE & Co. KG for approximately 760 million euros ($792 million) in cash in a deal slated to close by the end of the third quarter. The acquisition is expected to be completed by the end of the third quarter of 2025. RemainCo, the remaining company, is expected to generate constant currency revenue growth of over 6%. RemainCo will have a simplified and nimble operating model with a streamlined manufacturing footprint, transitioning from 19 manufacturing facilities anticipated at Teleflex as of year-end 2025 to 7 facilities at RemainCo post-separation, with the remaining 12 expected to transfer to NewCo. The transaction is also expected to be accretive to EPS growth, with RemainCo anticipated to deliver double-digit EPS growth in the first full year following the separation.

NewCo, with approximately $1.4 billion in revenue in 2024, is also expected to benefit from a simplified operating model. NewCo is expected to generate low-single digit constant currency revenue growth with a mid-50% adjusted gross margin profile. Teleflex will initiate an executive search for key management positions at NewCo shortly.

Teleflex also reported fourth-quarter sales of $795.4 million, up 2.8% year over year (+3.2% on constant currency), missing the consensus of $813.23 million. The medical devices company reported adjusted EPS of $3.89, beating the consensus of $3.86. Guidance: Teleflex expects 2025 revenue growth of (0.4)% to 0.7%, with adjusted EPS of $13.95-$14.35 versus consensus of $15.23. CFO transition: Teleflex announced that Thomas Powell, the company’s CFO, will retire, effective April 1.

The planned separation and acquisition have raised concerns among investors, as the stock price has plummeted. The mixed Q4 earnings results and guidance have also contributed to the stock's decline. As the company moves forward with its strategic plans, investors will be watching closely to see if Teleflex can turn things around and regain their confidence.