Merrill Lynch cuts Teva estimate

The investment house still sees 40% upside in the stock.

Merrill Lynch has cut its target price for Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) from $55 to $53, reflecting a 40% premium on Friday's close on Nasdaq. The investment house also cut its forecasts for the company for the next three years, but reiterated its "Buy" recommendation for the share.

Merrill Lynch analysts Haim Israel, Gregg Gilbert, and Sumant Kulkanari predict that Teva will report earnings per share of $5.30 on $20.4 billion revenue in 2012, down from their previous forecast of earnings per share of $5.52 on $20.7 billion revenue. Merrill Lynch's estimates are below the consensus estimate of earnings per share of $5.59 on $20.98 billion revenue.

The analysts say that they reiterated their recommendation for Teva because, "we continue to like Teva's business mix/geographic diversity and vertically integrated model and believe that the Street may be overly pessimistic on the size and duration of the Copaxone stream."

Teva's share price fell 1.6% by midday on the TASE today to NIS 149.40, after falling 0.2% on Nasdaq on Friday to $38.61, giving a market cap of $36.4 billion.

Published by Globes [online], Israel business news - www.globes-online.com - on May 28, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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