Merrill Lynch Bank of America has cut Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) recommendation by two ratings to "Underperform" as the company's share price went into a tailspin this week on US lawsuit concerns. Merrill Lynch has also slashed the price target from $19 to $9. Analyst Jason Gerberry cited, the Israeli pharmaceutical company's, "legal exposure and a pipeline that is interesting but has insufficient upside optionality."
It was only in January that Merrill Lynch raised Teva's recommendation by two ratings to "Buy." But since then Teva's sharfe price has fallen 44% despite the optimistic recommendation.
Last night on Wall Street, Teva's share price closed up 1.89% at $9.70, giving a market cap of $10.6 billion. The share price opened today down 1.35% at $9.57. Teva is up 5.72% on the TASE today after losing 13.34% yesterday.
The latest plunge in Teva's share price follows the $85 million settlement agreed by the company with the state of Oklahoma regarding the damage caused by opioid addiction. Despite initially arguing that it would fight the case, Teva came to a settlement and the assumption is that this is only the first of many. In addition, Teva is facing lawsuits regarding price fixing of generics in the US between 2013 and 2015 and UBS estimates that all these lawsuits together could cost Teva as much as $4 billion.
Published by Globes, Israel business news - en.globes.co.il - on May 30, 2019
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