Barclays Capital and IBI Investment House today published new upbeat reviews on Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA), ahead of the publication of its financial report for the first quarter of 2010 tomorrow. Barclays Capital reiterates its "Overweight" recommendation and $69 target price for Teva, while IBI reiterates its "Buy" recommendation with a target price of $73.
Barclays Capital analysts Richard Silver and Ann Trimble see a silver lining in Teva's recent share price underperformance. Since April 21, Teva's share price is down 5.7%, while the S&P 500 Index is down only 1.5%. They believe that since the underperformance is not based on any significant new fundamental developments at the company, it creates "a very attractive opportunity particularly for longer-term oriented investors."
Silver and Trimble add that since Teva's first quarter earnings will probably be the weakest quarter of the year, the share should strongly outperform as the year progresses with strong financials toward the end of the year, as the acquisition of Germany's Ratiopharm GmbH is factored in.
Silver and Trimble expect Teva to at least meet the analysts' earnings per share consensus estimate of $0.89. They point to the company's guidance, which predicts that the first quarter earnings per share will be less than the $0.94 for the fourth quarter of 2009, because there were no new generic drug launches. The analysts believe that Teva's second quarter will be stronger than the first, and that the peak quarters for the year will be the third and fourth quarters. They expect Teva to launch a generic version of Effexor XR in the third quarter.
Silver and Trimble expect an "uneventful" conference call for Teva's first quarter results.
IBI analyst Natali Gotlieb predicts "a very good quarter for Teva", thanks to big launches late last year, including generic versions of Allegra, Prevacid, and Pulmincort, which should boost the company's revenue and profits. These will be partly offset by a competitor's launch of generic Lotrel, which will end Teva's exclusivity. She expects sales to reach $3.7 billion, 18% more than for the corresponding quarter.
Teva's share closed at $58.73 on Nasdaq on Friday. The share price rose 0.8% in morning trading today on the TASE to NIS 221.
Published by Globes [online], Israel business news - www.globes-online.com - on May 3, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010