Teva Pharmaceutical’s Promising Long-term Outlook: Buy Rating Backed by Strategic Initiatives and FCF Growth Potential

Bank of America Securities analyst Jason Gerberry has maintained their bullish stance on TEVA stock, giving a Buy rating today.

Jason Gerberry has given his Buy rating due to a combination of factors that highlight Teva Pharmaceutical’s promising long-term financial outlook. The company’s Strategy Day revealed encouraging targets, particularly in improving free cash flow (FCF), which has been stagnant from 2022 to 2024. Gerberry believes that the company’s ability to enhance FCF conversion is crucial for stock valuation growth. Despite the recent stock performance and lack of major announcements at the event, Gerberry’s confidence is bolstered by Teva’s new brand cycle and anticipated developments such as the Austedo/IRA events, the divestiture of TAPI, and the launch of olanzapine-LAI in 2026.
Additionally, Teva’s ambitious goal to double its innovative brand sales by 2030 further supports the Buy rating. The company aims to achieve $5 billion in revenue from growth brands by 2030, nearly doubling the 2024 levels. Gerberry notes that while his forecasts are slightly conservative compared to Teva’s, the company’s strategic initiatives, including operational cost savings and a shift in brand growth, are expected to significantly enhance FCF. This potential for increased FCF yield positions Teva favorably compared to other large US pharmaceutical companies, reinforcing Gerberry’s positive outlook on the stock.

In another report released today, UBS also maintained a Buy rating on the stock with a $24.00 price target.

Based on the recent corporate insider activity of 41 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.