After visiting Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) head offices in Israel, Goldman Sachs has raised the company's target price by $3 to a 16.7% premium on the share's current price on the NYSE. Teva's share price is already up 115% since its low-point last November. Goldman Sachs analyst Jami Rubin continues to give Teva a "Buy" recommendation - a recommendation first given in December.
Rubin wrote, "Last week we visited Teva in Israel and we met with Kåre Schultz (President & CEO), Mike McClellan (CFO), Brendan O’Grady (EVP, North America Commercial), and Dr. Carlo de Notaristefani (EVP, Global Operations). Roughly one year ago we traveled to Israel to meet with TEVA’s interim management team (see report) and would underscore the stark shift from being fairly reactionary and directionless to now being a company led by action-oriented leaders with a rapid and clear path to recovery.
On Teva's streamlining plan she wrote, "While still early in the turnaround phase, our confidence in the de-leveraging story and increasingly clear line of sight to growth (beginning in 2020) keeps us Buy rated and see the stock continuing to move higher, with positioning still positive (majority of sell side ratings are sell or neutral according to FactSet)."
Our takeaway from last week’s meeting is that we believe guidance is likely to be revised higher, again, as Copaxone is proving to be more durable despite generic competition, US generics is stabilizing and guidance which was set on Q1 still assumes ProAir competition this year. This combined with upside potential for Austedo (just scratching the surface of a huge TD market; could be a more than $1bn drug and Fremanezumab (Teva has high confidence in a fall 2018 launch) could drive meaningful upside to EBITDA and cash flow for speedier debt repayment, making above four times the leverage easily achievable by 2020 in our view.
Published by Globes [online], Israel business news - www.globes-online.com - on June 25, 2018
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