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Teva Pharmaceutical Industries Ltd (ADR) Wins Over an Even More Bullish Perspective from Analyst Following Meeting with New CEO

Goldman Sachs' Jami Rubin now spotlights 16% return potential for TEVA shares, putting his bet on the Israeli pharma giant's recovery.


Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) shares are flying almost 8% today after Wall Street giant Goldman Sachs has gotten even more upbeat on this beleaguered biotech player and its chances at recovery; especially under the guiding hand of new Danish CEO Kare Schultz.

On back of an investor presentation from Schultz on Monday and a one-on-one meeting with the CEO on Tuesday, Goldman Sachs analyst Jami Rubin sings the company’s praises, asserting not only is he “more confident that under [Schultz’s] leadership TEVA is on a path toward recovery,” but this also is “probably sooner than many investors appreciate.”

Angling for “shares to move higher as management hits its de-leveraging and EBITDA targets,” the analyst maintains a Buy rating on TEVA stock while bumping up the price target from $20 to $25, which implies a close to 16% upside from current levels. (To watch Rubin’s track record, click here)

As far as Schultz’s restructuring initiative, Rubin is positive that “targets are achievable” and “portfolio rationalization will be accretive to EBITDA.”

“Kare Schultz remains highly confident in TEVA hitting its $3 bn restructuring targets and sees no risk of further business deterioration due to the deep cuts and portfolio rationalization,” the analyst writes.

In a nutshell, “Two major investor concerns, the debt issue/downgrade risk along with impact from portfolio optimization on the top-line, are overstated in our view. If anything, we think there could be upside to our Copaxone estimates and were encouraged to learn that TEVA has more FTF opportunities than its competitors, according to management,” Rubin contends.

TipRanks underscores a divided Wall Street not ready to bet on this embattled Israeli pharma giant just yet. Out of 22 analysts polled in the last 3 months, 6 are bullish on Teva stock, 12 remain sidelined, while 4 are bearish on the stock. Is the biotech player overvalued or undervalued based on these analysts’ expectations? Worthy of note, the 12-month average price target stands at $19.12, suggesting a 11% downside from where the stock is currently trading.