US investment bank Goldman Sachs has cut the price target of Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) from $13 to $10, seeing a downsize to Teva's expected EBITDA in the second half of the year and concerns about the legal proceedings against the Israeli pharmaceutical company. Nevertheless, Goldman Sachs leaves its "Neutral" recommendation for Teva unchanged, and the price target remains 14.2% above the share closing price on Wall Street last night.
Teva's share price closed up 0.23% on the NYSE yesterday at $8.76, giving a market cap of $9.5 billion. The share price has fallwen 30% in the past few months and the company will publish its financial report for the third quarter of 2020 on November 5. The analysts' consensus is revenue of $4.1 billion for the third quarter and non-GAAP earnings per share of $0.58.
Goldman Sachs believes that the challenging trend on the market will continue and that third quarter net profit will be slightly below the analysts' forecasts because Teva has not launched any more major generic drugs in the quarter while its branded product Ajovy for treating migraines has made only slight share gains in the third quarter and the growth rate of Austedo for Huntington's disease chorea has moderated.
Goldman Sachs believes that Teva won't change its annual guidance but will perhaps narrow the range.
On the subject of legal proceedings, Goldman Sachs stresses that Teva's "Legal overhands mounted in Q3" with two lawsuits alleging that the company violated anti-kickback statutes over the promotion of Copaxone between 2006 and 2015.
Goldman Sachs revises down its EBITDA forecast for Teva to about $2.3 billion due to expected lower second half revenue.
Out of 26 analysts currently covering Teva, 17 give a "Neutral" recommendation, four have a negative recommendation and four give a positive recommendation.
Published by Globes, Israel business news - en.globes.co.il - on October 29, 2020
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