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Integra's Product Launch a Growth Catalyst, Rivalry Rife

Zacks Equity Research

On Apr 2, we issued an updated research report on Integra LifeSciences Holdings Corporation IART. The company has been noticing certain major developments overseas. However, a tough competitive landscape is concerning.

This New Jersey-based company is a leading developer, manufacturer and marketer of surgical implants and medical instruments for use in neurosurgery, extremity reconstruction, orthopedics and general surgery.

Shares of this Zacks Rank #3 (Hold) company have outperformed the industry over the past three months. The stock has rallied 27.4% compared with the industry’s 21% rise.

Integra LifeSciences exited the fourth quarter of 2018 on a solid note with better-than-expected numbers. Last year marked the fifth consecutive year of double-digit revenues and EPS growth. The company’s progress with its channel expansion strategy and Codman integration buoys optimism on the stock.

Integra LifeSciences Holdings Corporation Price

Integra LifeSciences Holdings Corporation Price | Integra LifeSciences Holdings Corporation Quote

Benefiting from product launches and an enhanced sales force performance, the company expects faster organic growth during the second half of 2019. Notably, it is successfully executing its plans within the Orthopedics and Tissue Technologies segment to broaden its sales channel, improve focus and competitiveness as well as better align its product portfolio with the clinical customers.

In this segment, the company realigned 100% of in-patient wound reconstruction and orthopedic territories as part of its channel extension strategy. In the second half of 2018, the company saw a positive response in the sales performance of regenerative technologies franchises.

Moreover, heavy investments in research and development were encouraging. The company also entered into several partnerships including a program with Healogics wherein it is a primary provider of cellular and tissue-based products for the treatment of acute and chronic wounds.

Meanwhile, Integra LifeSciences faces severe competition in the surgical implants and medical instruments market. The company needs a consistent innovation to ward off rivalry. Moreover, consolidations in the industry could induce intense pricing pressure.

Key Picks

Some better-ranked stocks in the broader medical space are Stryker Corporation SYK, Penumbra, Inc., PEN and Varian Medical Systems, Inc VAR, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stryker’s long-term earnings growth rate is projected to be 10%

Penumbra’s long-term earnings growth rate is predicted at 20.9%.

Varian’s long-term earnings growth rate is forecast at 8%.

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