Barclays sees 20% upside in Teva


Analyst Douglas Tsao sees consolidation in the generics market and a Teva acquisition.

Barclays sees consolidation in the generic pharmaceutical market and has raised its target price for Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) by 7% to $75. This is a 16% upside on the company's current share price and Barclays sees an upside of 20% by 2018.

Douglas Tsao wrote, "While we dont expect anything imminent, we expect to see consolidation in the generic marketplace, especially given Teva's stating its willingness to accelerate the process through a transformative acquisition. Teva's interest to drive consolidation first arose at this years GPHA annual meeting in February. Those comments were overlooked for the most part, though gained greater urgency when news reports suggested Teva was looking to acquire Mylan."

He continued, "Strategically, the deal would re-establish Teva as the dominant market leader as well as potential EPS accretion of up to 20% by 2018, in our view. We raise our price target to $75 as Teva offers evidence EPS growth through capital deployment, evidenced by last weeks acquisition of ASPX.

"Teva has also been linked to Indian generics manufacturer Cipla and we see other opportunities besides those two."

Last week Teva acquired branded drug developer Auspex Pharmaceuticals for $3.2 billion, its biggest acquisition since buying Cephalon for $6.8 billion in 2011.

Oppenheimer has raised Its Teva recommendation to "Overweight" and lifted the target price to $77, 24% above its market value.

Published by Globes [online], Israel business news - - on April 7, 2015

Copyright of Globes Publisher Itonut (1983) Ltd. 2015

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