Investment bank Morgan Stanley has lowered its recommendation for Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) share from "Market outperform" to "Market perform," with a target price of $17.
"Teva is likely to provide an upside in the coming quarters as a result of its cost-cutting and conservative guidance for Copaxone. At the same time, we believe that the market has taken these considerations into account in pricing the share. We believe that Teva needs to show growth of more than one year in order to improve its performance," Morgan Stanley's economists wrote.
Last November, Morgan Stanley upgraded its recommendation for Teva's share to "Market outperform," with a $27 target price. The current target price is $10 less than the previous one. Morgan Stanley wrote in November that Teva's profits would exceed the forecasts because of its cost-cutting - something that failed to materialize.
HSBC has recommended "Sell" for Teva's share and set a target price of only $12.
Teva's closing share on Wall Street yesterday was $16.73, close to Morgan Stanley's new target price. It was reported yesterday that Purdue, the leading opioid manufacturer in the US with a market share of over 60%, was considering a Chapter 11 bankruptcy filing in order to evade 2,000 lawsuits filed against opioid manufacturers. The report put the sector into a tailspin in yesterday's trading. Estimates of Teva's exposure to such claims range from $300 million to $3 billion.
Morgan Stanley upgraded its recommendation for Mylan Pharmaceuticals' share to "Market outperform," with a $35 target price. Mylan's closing share price yesterday was $27.39.
Published by Globes, Israel business news - en.globes.co.il - on March 6, 2019
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