Israeli analysts have begun to comment on the second quarter financial results of Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA), published this morning, and which demonstrate the company's strength, even during a global economic crisis.
Bank Hapoalim analyst Gilad Sarig has raised his target price for Teva to $57 from $52, a p/e ratio of 13 on the company's expected revenue in 2010. He cited "the strength of Copaxone, the probably strong synergy from the merger with Barr, and expectations of profit growth of at least 30% in 2010" as the reason for the new target price.
Sarig also raised his forecast for Copaxone sales to $2.6 billion in 2009, reflecting 21% growth.
Sarig wrote, "Teva continues to display excellent results even in these difficult times in the global economy. The company's balanced business model has consistently proved itself quarter after quarter. We believe that the 2010 results are not yet reflected in the share price, and we recommend increasing exposure to the share in investment portfolios."
Clal Finance analyst Gal Reiter raised his target price for Teva to $57 earlier this week. Today, in the wake of the company's good financial, she asks whether the company will raise its guidance at the upcoming conference call.
Reiter says, "The company does not usually revise its guidance in the second quarter, so it is possible that this time it will spring a surprise, or at least reduce its guidance range upwards." She also pointed to the $1.1 billion reduction in Teva's debt to Bank Hapoalim (TASE: POLI) and Bank Leumi (TASE: LUMI), suggesting that Teva "is preparing the groundwork for another major acquisition in the short term."
Psagot analyst Limor Gruber was pleasantly surprised by Teva's revenue in Eastern Europe and Latin America, although US revenue was in line with her previous forecast. "The company continues to present high gross profit margins, thanks to the weakness of the currencies in its areas of business around the world. The 9% drop in revenue therefore had almost no effect on the operating profit," she notes. As for the synergy with Barr, she says, "The combined company is growing at 11-12%. It seems that the integration with Barr is beginning to bear fruit."
Published by Globes [online], Israel business news - www.globes-online.com - on July 28, 2009
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