Analyst Shines Light on Teva Pharmaceutical’s (TEVA) Recent Stock Weakness


Borrowing heavily to become a leading generic drug company just as generic drug prices began tanking has been a drag on Teva Pharmaceutical (TEVA). This drug maker suffered plenty of PR setbacks last year, and long-term shareholders know the stock was worth three times as much just three years ago.

That said, investors are still fearful after seeing their TEVA shares falling nearly 13% this week. Cantor analyst Louise Chen points out that he received a meaningful amount of incoming questions/calls regarding TEVA’s recent stock weakness.

“Yesterday morning, TEVA confirmed with us that there is no new news they are aware of driving the stock’s recent performance. That said, we would highlight some takeaways from discussions we have had with investors. Some have interpreted TEVA’s publicly disclosed comments to mean that there could be higher than expected spending on TEVA’s CGRP franchise to drive uptake of the drug. We would also note that LLY’s CGRP is likely to receive approval in the near term. This would be the third CGRP approved and underscore there are two branded companies with CGRPs competing with TEVA. We often get the question as to how big the market is now that pricing has been moderated by the players in the space. Lastly, it is our understanding that some of TEVA’s competitors have a pricing arbitrage as it relates to CGRP. Based on our diligence, we don’t believe this is an issue, but its worth noting,” the analyst commented.

Chen reiterates a Neutral rating on Teva shares, with a price target of $25, which represents a potential upside of 18% from where the stock is currently trading. (To watch Chen’s track record, click here)

Net net, TipRanks reveals TEVA as a stock that has not drawn a vote of confidence among Wall Street opinion. Out of 11 analysts polled in the last 3 months, only 1 is bullish on Teva stock, while 10 remain sidelined. Worthy of note, the 12-month average price target stands at $23.71, which actually implies a 12% upside for the stock. (See TEVA’s price targets and analyst ratings on TipRanks)

 

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