Clal Finance reiterated its "Outperform" recommendation for Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) and target price of $58. Analyst Jonathan Kreizman said that Teva published weaker than expected results for the first quarter, and that tax rates and a share buyback program boosted the company's earnings per share by $0.03.
Kreizman attributed Teva's results to the continuing high profit margins for the company's multiple sclerosis treatment Copaxone, which are on track to generate $3.7 billion in full-year sales. He added, "Worrying weak generic sales in the US were accompanied by stable sales in Europe, although a challenging business environment in Germany is affecting progress on the rest of the continent. Besides Copaxone, the ray of light in the generics business is that the map can only rise."
Harel Finance analyst Steven Tepper agrees that Teva's financial report was weaker than expected, and that the weakness in US generics sales underscored the importance of new product launches. He attributed Teva's weak US sales to the lack of new launches, as well as a drop in production capacity. "However, as expected, there was strong expansion in generics outside the US, mainly thanks to the acquisition of Ratiopharm and double-digit growth in all brand drugs."
Tepper reiterated his "Buy" recommendation for Teva.
Teva's share price closed at $47.14 on Nasdaq yesterday, giving a market cap of $44.3 billion, and rose 0.6% by early afternoon on the TASE today to NIS 162.90.
Published by Globes [online], Israel business news - www.globes-online.com - on May 11, 2011
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