Puzzled by Teva's underperformance Goldman Sachs says Buy

Kare Schultz Photo: PR
Kare Schultz Photo: PR

Analyst Jami Rubin: If investors take a 12-month view, we see a meaningful upside to the stock.

Goldman Sachs is puzzled by underperformance of Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) with the share price of the Israeli company down 14% over the past week's trading on Wall Street. The US investment bank sees this weakness as an opportunity and analyst Jami Rubin keeps her "Buy" recommendation and puts Teva on its "Conviction List' of top "Buy" recommendations.

Rubin writes that the US Food and Drug Administration (FDA) approval of Eli Lilly's rival migraine drug to Teva's newly approved Ajovy was "already expected and well understood." Moreover, she cites a "flurry of positive news such as the approval of its CGRP Ajovy, gCialis with 180 days exclusivity, and gepiPen not to mention the first positive Phase III study of Fasinumab, an NGF inhibitor not in our models, all of which are underappreciated in our view and underscore Teva's near perfect execution since Kare Schultz became CEO in late 2017."

Rubin adds, "After two years of consistent earning misses and downward guidance revision following the Actavis acquisition, under Kare Schultz Teva has beaten and raised guidance twice so far this year (albeit more realistic low expectations)." Among other things, she notes that the, "Beats and the raises have been driven by better than expected defense of Copaxone."

Rubin points out that 70% of analysts hold neutral or negative recommendations on Teva and adds that, "We can't control for the volatility but if investors take a 12-month view, we see a meaningful upside to the stock."

Published by Globes [online], Israel business news - www.globes-online.com - on October 2, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

Kare Schultz Photo: PR
Kare Schultz Photo: PR
Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018