Analyst Jason Gerberry from Bank of America Securities reiterated a Buy rating on Teva Pharmaceutical (TEVA – Research Report) and increased the price target to $22.00 from $20.00.
Jason Gerberry has given his Buy rating due to a combination of factors that suggest Teva Pharmaceuticals is poised for growth. The company’s first-quarter update demonstrated a solid performance, with a 6% increase compared to the drug sector’s flat growth, largely driven by cost-saving initiatives. These savings are expected to enhance Teva’s bottom line by 2026, despite facing significant product headwinds, and help the company achieve its 2027 profitability targets. Gerberry has revised the company’s EBITDA to a mid-single-digit compound annual growth rate, reflecting increased confidence in its financial outlook.
Additionally, Teva’s new product cycle, including promising developments like Uzedy and the upcoming olanzapine-LAI launch, is expected to drive future growth. The company’s $700 million net savings program, aimed at optimizing costs and improving gross margins, further supports this positive outlook. These initiatives are seen as a bridge to growth, helping Teva transition from older products to a new, clinically de-risked product cycle. Overall, Gerberry views the current valuation as undemanding and believes the shift to a growth multiple is justified, reinforcing the Buy recommendation.
In another report released on April 28, HSBC also maintained a Buy rating on the stock with a $20.00 price target.
Based on the recent corporate insider activity of 42 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of TEVA in relation to earlier this year.