Leerink Partners analyst, Richard Newitter, is looking through the Teleflex (NYSE: TFX) increase in guidance because the bulk of the upside came from a lower tax rate. He raises the PT however as estimates increase. PT goes to $153 (from $143) on 19.5x 2017E EPS. The firm maintained a Market Perform rating.

TFX delivered in-line 4Q sales with a tax-driven EPS beat along with guidance roughly in line with consensus. Bigger news was an incremental restructuring and lower tax rate assumption, both of which lead us to higher EPS forecasts.

Rev of $485M (+5% organic selling day adjusted) was a bit ahead of our $482M with particular strength in Vascular, Surgical and OEM. Asia was particularly strong, growing 18% cc. This included a 10% increase in core product volume and was also up against an easier comp in China. A lower tax rate provided ~$0.11 upside, all in EPS of $2.01 beat the Street's $1.92.

TFX's new restructuring plan is expected to yield annualized savings of $12-$16M beginning in 2017, and management noted that there could be additional future announcements increasing the savings that would be incremental to this amount. Although the plan will be incremental to the 350-400bps GM expansion goal (vs. 2015) expected by 2018, mgmt is taking a conservative approach and not quantifying/baking in any contribution just yet.

2016 sales/EPS guidance brackets the Street (sales 5-6% organic, EPS $7.00-$7.15), but what stands out in our view is that mgmt now expects a tax rate of 18.5-19.5% vs. prior long-term guidance of 22-23% established at last year's analyst day. All else equal, the EPS range should have been higher given the lower tax rate and suspension of the med device tax, but some of the savings get absorbed into a higher SG&A spend, while mgmt will reinvest most of the medtech tax expense into R&D, limiting flowthrough to the bottom line.

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Shares of Teleflex closed at $142.99 yesterday.