What Happened?
A number of stocks jumped in the morning session after positive inflation data fueled hopes for an interest rate cut by the Federal Reserve. The latest Consumer Price Index (CPI) report showed inflation rose by a modest 0.2% in July and 2.7% over the last year. This cooler-than-expected data prompted a significant market rally, with the S&P 500, Dow, and Nasdaq all climbing as investors grew more optimistic. The prevailing view is that easing inflation gives the central bank room to lower interest rates. Lower rates typically reduce borrowing costs for businesses and make stocks more attractive relative to bonds, contributing to widespread gains across sectors like healthcare.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Therapeutics company Moderna (NASDAQ: MRNA) jumped 3.1%. Is now the time to buy Moderna? Access our full analysis report here, it’s free.
- Surgical Equipment & Consumables - Specialty company Teleflex (NYSE: TFX) jumped 4.1%. Is now the time to buy Teleflex? Access our full analysis report here, it’s free.
- Dental Equipment & Technology company Envista (NYSE: NVST) jumped 3.1%. Is now the time to buy Envista? Access our full analysis report here, it’s free.
- Medical Devices & Supplies - Specialty company Enovis (NYSE: ENOV) jumped 3.5%. Is now the time to buy Enovis? Access our full analysis report here, it’s free.
- Health Insurance Providers company UnitedHealth (NYSE: UNH) jumped 3%. Is now the time to buy UnitedHealth? Access our full analysis report here, it’s free.
Zooming In On Teleflex (TFX)
Teleflex’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock dropped 22.9% on the news that the company reported disappointing fourth-quarter results, with revenue missing expectations by a significant margin. On a constant currency basis, revenue increased 3.2%, but this still fell short of Wall Street's estimates. Weak demand in Interventional Urology wiped out gains in the Interventional and Surgical units. Looking ahead, the company's 2025 revenue guidance implies little to no growth, with management projecting revenue to be flat to slightly up. Overall, this was a weaker quarter, weighed down by sluggish growth, margin pressures, and a subdued outlook.
Teleflex is down 32.8% since the beginning of the year, and at $120.33 per share, it is trading 51.3% below its 52-week high of $247.32 from September 2024. Investors who bought $1,000 worth of Teleflex’s shares 5 years ago would now be looking at an investment worth $320.02.
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