Jefferies raises Teva to "Buy"

Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) is set to issue strong guidance for 2024, US investment bank Jefferies believes. Accordingly, Jefferies has raised its recommendation for Teva’s stock from “Hold” to “Buy and lifted the price target for its share from $10 to $14, a 22% upside on the Israeli pharmaceutical company’s closing price on Wall Street yesterday.

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Jefferies analysts say that Teva is implementing a growth strategy and expects several positive developments this year including strong guidance (with the publication of its end of year 2023 results) and positive updates about its drug products development pipeline in the second half of 2024.

Jefferies says it is bullish on Teva’s share due to a cautious consensus among analysts, despite the improvement in generics, continued strength in key products, the addition of new launches, and an upside from the launch of biosimilars.

While the analysts’ consensus is for annual revenue of $15.5 billion and EBITDA of $4.6 billion, their numbers are higher by $180 million and $130 million respectively.

Jefferies says that there is a trend of improved pricing in the generics market and in branded drugs Teva has several engines of growth including Austedo for the treatment of chorea associated with Huntington’s disease, Ajobe for migraines and Uzedy for schizophrenia. The analysts also mention products in development such as AntiTLIA and Olanzapine LAI for which the results of Phase II and Phase III clinical trials respectively will be published in the second half of the year.

Jefferies new price target gives Teva’s stock an EBITDA multiple of seven in their estimation in 2025.

Teva, led by CEO Richard Francis, has a market cap of $12.9 billion, after the share price rose 14.5% in 2023 and an additional 10% since the start of 2024.

Published by Globes, Israel business news – en.globes.co.il – on January 23, 2024.

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