Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) will not be substantially hurt by the ongoing Covid-19 crisis and may even increase sales of certain products because of it, thinks Steven Tepper, IBI Investment House senior research analyst, pharmaceuticals, biotechnology and medical devices, in a bullish assessment of the Israeli pharmaceuticals company.
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In Tepper’s opinion, 2020 will be a turning point for Teva. He expects higher revenue and profit than the analysts’ consensus: $17.1 billion and $2.65 per share, respectively, and thinks that the company’s guidance is conservative and reflects the uncertainty generated by the coronavirus crisis.
Teva’s recovery, in his assessment, will come from several areas including moderate growth in generic activities, in part due to the recent launch of biosimilars, continued streamlining, and a reduction in the number of plants, growth in sales of Austedo for the treatment of chorea associated with Huntington’s disease and tardive dyskinesia, and renewed growth in sales of migraine treatment Ajovy. All these will compensate for the continued slow erosion in Copaxone sales and the eventual compromise payout in the opioid scandal. Tepper adds that Teva’s debt should be reduced to about $23 billion by the end of the year, mostly spread over the long term at relatively low interest rates.
Tepper observes that Teva’s share price is trading at a low profit multiple of about 4.5. He said, “CEO Kare Schultz continues to show leadership even in his handling of the legal crises and organizing the debt structure. We continue to see the company as a buy opportunity for long-term investment.”
Teva’s share price is currently down 0.62% on NYSE at $11.14, giving a market cap of $12.442 billion.
Published by Globes, Israel business news – en.globes.co.il – on July 8, 2020
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