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Teva Pharmaceutical Industries Limited (IL:TEVA)
:TEVA
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Teva
(TEVA)
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Rating:63Neutral
Price Target:
12,088.00
▲(24.98% Upside)
Action:ReiteratedDate:01/30/26
The score reflects improving fundamentals (notably the 2025 profitability and cash-flow rebound) and supportive technical momentum, partially offset by high leverage and earnings volatility. Valuation is not especially cheap at a 24.65 P/E without a stated dividend yield, and the earnings call points to near-term headwinds (Revlimid, Q1 softness) despite solid innovation-driven growth and longer-term deleveraging targets.
Positive Factors
Improved free cash flow generation
A material FCF rebound in 2025 provides durable funding for debt reduction, R&D and launch investments, and the transformation program. If sustained, stronger cash conversion reduces refinancing risk and supports management's multi-year deleveraging and margin targets.
Rapidly growing specialty portfolio
High-growth, higher-margin specialty products are diversifying revenue away from volatile generics. Sustained adoption (AUSTEDO XR, UZEDY injection uptake, AJOVY traction) supports durable margin expansion and recurring cash flows as launches mature and payer access solidifies.
Transformation program & biosimilars pipeline
A defined cost-savings program backed by early delivery increases operating leverage potential and complements a growing biosimilars build. Realized savings plus planned biosimilar launches provide structural support to margins and the firm's long-term free cash flow profile.
Negative Factors
Elevated leverage and large absolute debt
High absolute debt and past multi-year leverage weaken financial flexibility and increase sensitivity to cash-flow shocks. Although debt has trended down, sizeable outstanding obligations constrain capital allocation and mean deleveraging remains critical to lowering refinancing and covenant risks.
Generics stagnation and reliance on one‑offs
A core generics business showing flat volumes and regional softness reduces topline resilience. Dependence on milestone revenues or one-time items to drive headline growth makes underlying cash and earnings less predictable over a multi-quarter horizon and challenges durable revenue diversification.
Material product and pipeline execution risks
Losing Revlimid generics revenue and multiple binary clinical/regulatory milestones create tangible downside risk to forecasts. Replacing large legacy cash flows while depending on successful launches/readouts raises execution risk and could impair near-to-medium-term margin and deleveraging progress.
Teva (TEVA) vs. iShares MSCI Israel ETF (EIS)
Market Cap
₪123.45B
Dividend YieldN/A
Average Volume (3M)1.92M
Price to Earnings (P/E)25.4
Beta (1Y)0.59
Revenue Growth-5.10%
EPS GrowthN/A
CountryIL
Employees37,000
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - Specialty & Generic
Share Statistics
EPS (TTM)297.30
Shares Outstanding1,164,638,700
10 Day Avg. Volume1,312,069
30 Day Avg. Volume1,917,294
Financial Highlights & Ratios
PEG Ratio-0.13
Price to Book (P/B)4.58
Price to Sales (P/S)1.94
P/FCF Ratio14.18
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Teva Business Overview & Revenue Model
Company DescriptionTeva Pharmaceutical Industries Limited, a pharmaceutical company, develops, manufactures, markets, and distributes generic medicines, specialty medicines, and biopharmaceutical products in North America, Europe, and internationally. The company offers sterile products, hormones, high-potency drugs, and cytotoxic substances in various dosage forms, including tablets, capsules, injectables, inhalants, liquids, transdermal patches, ointments, and creams. It also develops, manufactures, and sells active pharmaceutical ingredients. In addition, it focuses on the central nervous system, pain, respiratory, and oncology areas. Its products in the central nervous system include Copaxone for the treatment of relapsing forms of multiple sclerosis; AJOVY for the preventive treatment of migraine; and AUSTEDO for the treatment of tardive dyskinesia and chorea associated with Huntington disease. The company's products in the respiratory market comprise ProAir, QVAR, ProAir Digihaler, AirDuo Digihaler, and ArmonAir Digihaler, BRALTUS, CINQAIR/CINQAERO, DuoResp Spiromax, and AirDuo RespiClick/ArmonAir RespiClick for the treatment of asthma and chronic obstructive pulmonary disease. Its products in the oncology market include Bendeka, Treanda, Granix, Trisenox, Lonquex, and Tevagrastim/Ratiograstim. Teva Pharmaceutical Industries Limited has a collaboration MedinCell for the development and commercialization of multiple long-acting injectable products, a risperidone suspension for the treatment of patients with schizophrenia. The company was founded in 1901 and is headquartered in Tel Aviv-Yafo, Israel.
How the Company Makes MoneyTeva generates revenue primarily through the sale of generic pharmaceuticals, which are lower-cost alternatives to brand-name drugs. This segment constitutes a significant portion of its earnings, driven by a robust pipeline of generic products and a strong market presence in various regions. Additionally, Teva's specialty pharmaceuticals division contributes to its revenue through the sale of branded drugs and complex generics, which typically command higher prices. The company also collaborates with other pharmaceutical firms through strategic partnerships and licensing agreements, enhancing its product offerings and expanding its market reach. Factors such as patent expirations of branded drugs, regulatory approvals, and market demand for cost-effective medications significantly impact Teva's earnings.
Teva Earnings Call Summary
Earnings Call Date:Jan 28, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 13, 2026
Earnings Call Sentiment Positive
The call presented a strong shift toward higher-margin innovation with meaningful product-level growth (AUSTEDO, UZEDY, AJOVY), improved margins, pipeline momentum and disciplined transformation work — all supporting long-term targets. However, several near-term caveats temper enthusiasm: a sizeable Sanofi milestone boosted headline results, the generics business remains flat with regional softness, one-time inventory/gross-to-net dynamics could reverse, and clinical and reimbursement risks remain for some products. Management provided constructive 2026 guidance while acknowledging a Revlimid-related headwind and continued investment, and remains on track for its 2027 operating margin and deleveraging goals.Q4-2025 Updates
Positive Updates
Solid Full-Year Financial Performance
Revenue of $17.3B, up 5% year-over-year; EBITDA of $5.3B, up 12%; EPS up 19% to $2.93; free cash flow up 16% to $2.4B. Net debt/EBITDA improved to 2.5x (target 2.0x by 2027).
Innovative Portfolio Driving Growth
Combined innovative brands (AUSTEDO, UZEDY, AJOVY) reached $3.1B for the year, up ~35%, and exceeded $1B in Q4. Management highlights this portfolio as the primary growth driver and margin transformer.
AUSTEDO: Strong Underlying Momentum
AUSTEDO full year ~$2.2B, up 34%; Q4 $725M, up 40%. TRx +10% and milligram volume +19%; AUSTEDO XR accounts for 60% of new patients. 2026 guidance of $2.4B–$2.55B (potential to hit $2.5B earlier than expected).
UZEDY: Rapid Adoption
UZEDY full year $191M, up 63%; Q4 $55M, up 28%. TRx volume grew 123% YoY and guidance set at $250M–$280M for 2026, indicating fast expansion of the long-acting injectable market.
AJOVY Continues Strong Performance
AJOVY full year $673M, up 30%; Q4 $211M, up 43%. Maintains leading positions in key U.S. headache centers and international markets with 2026 guidance of $750M–$790M.
Pipeline Advancement and Near-Term Catalysts
Multiple R&D milestones in 2026: olanzapine LAI EU filing and anticipated approval by year-end, DARI Phase III enrollment completed (including pediatrics), duvakitug maintenance data due H1, anti-IL-15 (vitiligo) funding from Royalty Pharma and Phase Ib readouts — management expects seven milestones in 2026.
Transformation Program Progress
Transformation target of ~$700M net savings by 2027; achieved $70M in 2025 and on track to realize ~2/3 of savings by end-2026. Savings expected to support margin expansion toward a 30% non-GAAP operating margin target.
Biosimilars Portfolio Build
10 biosimilar assets in market today, 6 additional launches planned through 2027 and ~10 more from 2028+, targeting ~$400M of biosimilars growth by 2027 and positioning Teva as one of the largest biosimilar portfolios.
Negative Updates
Results Boosted by One-Time Milestone
Q4/2025 included a $500M development milestone from Sanofi that added ~$500M to revenue and ~$410M to adjusted EBITDA; management notes that excluding milestones Q4 revenue was slightly down (~1%), highlighting reliance on one-time items for headline growth.
Generics Business Stagnation and Regional Weakness
Generics were essentially flat for 2025 (ex-Japan); U.S. generics +2%, international +1%, but Europe declined 2%. Management emphasizes multi-year perspective but single-year flatness is a drag on topline diversity.
2026 Headwinds: Revlimid Loss and Q1 Dynamics
2026 guidance ($16.4B–$16.8B) excludes a ~$1.1B headwind from generic Revlimid loss and expects a light Q1 due to Revlimid lapping and AUSTEDO Q4 inventory/gross-to-net one-time benefits (approx. $100M) that may reverse or cause sequential destocking.
Margin and Investment Pressure
Non-GAAP operating margin decreased ~120 basis points to 26.7% in 2025 driven by higher planned OpEx to support innovative growth; sales & marketing spending elevated (management cited ~15.4% of revenue in quarter and still investing for launches).
Impairment and Adjustments
Q4 non-GAAP adjustments totaled $649M and included an impairment charge of $77.3M related to a European manufacturing facility, indicating some legacy asset write-downs.
Balance Sheet and Deleveraging Still in Progress
Net debt reduced to approximately $13B and net debt/EBITDA is 2.5x, improved but above the 2.0x target for 2027; continued deleveraging required to reach investment-grade ambitions.
Pipeline Execution and Clinical Risks
Several important readouts are pending (duvakitug maintenance data, anti-IL-15 vitiligo and celiac, emrusolmin futility analysis). Management notes fast execution but these programs carry typical clinical and regulatory risk, and emrusolmin enrollment/futility is an explicit execution risk.
Pricing and Payer Exposure for Certain Products
UZEDY has significant government (Medicaid/Medicare) exposure which can compress net pricing; management notes pricing discipline but government mix and PBM dynamics remain potential pressure points.
Company Guidance
Teva guided 2026 full‑year revenue of $16.4–$16.8 billion (approximately +1% to −2% vs. 2025 on a normal base, excluding the $500M duvakitug milestone and $75M Japan contribution), with non‑GAAP gross margin of 54.5%–55.5%, OpEx about 27%–28% of revenue, finance expenses of roughly $800M, a non‑GAAP tax rate of 16%–19%, non‑GAAP EPS of $2.57–$2.77 and free cash flow of $2.0–$2.4 billion; management flagged a ~ $1.1B 2026 headwind from generic Revlimid (about $300M of that affected Q1), expects Q1 to be light with second‑half revenue higher, and reiterated product guidance including AUSTEDO $2.4–$2.55B, UZEDY $250–$280M and AJOVY $750–$790M, while pursuing $700M of net transformation savings by 2027 (>$70M realized in 2025 and ~2/3 expected by end‑2026), targeting a 30% operating margin and net debt/EBITDA of 2x by 2027 (net debt ≈ $13B, current 2.5x) and a longer‑term free cash flow path to >$3.5B by 2030.Teva Financial Statement Overview
Summary
Financials are improving, led by a sharp rebound in 2025 profitability and a major step-up in operating and free cash flow. Offsetting this, leverage remains elevated and results have been volatile across multiple prior loss years, keeping overall financial risk meaningful.Income Statement
Revenue growth has re-accelerated, rising ~11.4% in 2025 versus low-single-digit growth in 2024, showing improving demand/price-mix momentum. Profitability has also inflected meaningfully: net income swung from a sizable loss in 2024 to a solid profit in 2025, and operating results recovered sharply versus the prior year. Offsetting these positives, earnings quality and consistency remain a concern given multiple loss years (2020, 2022–2024) and notable volatility in operating performance over the period.58
Neutral
Balance Sheet
Leverage remains elevated: total debt is still very large (~$17.4B in 2025) relative to equity, and prior-year debt-to-equity levels were high (roughly 2.3x–3.4x from 2020–2024). The balance sheet has improved at the margin with debt trending down from 2020–2024 and equity rebuilding from 2024 to 2025, but the company is still carrying meaningful financial risk and has a track record of negative returns to shareholders in several years.46
Neutral
Cash Flow
Cash generation strengthened materially in 2025, with operating cash flow around $3.1B and free cash flow around $2.6B, far above the prior years shown. Free cash flow growth is extremely strong in 2025, suggesting better underlying cash earnings and/or working-capital/timing benefits. The main weakness is that cash flow was much lower and more uneven in earlier years (and declined in 2023–2024), so investors should watch durability of the 2025 step-up.72
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 18.68B | 16.54B | 15.85B | 14.93B | 15.88B |
| Gross Profit | 9.63B | 8.06B | 7.65B | 6.97B | 7.59B |
| EBITDA | 3.42B | 777.00M | 1.56B | -925.00M | 2.88B |
| Net Income | 1.53B | -1.64B | -559.00M | -2.35B | 417.00M |
Balance Sheet | |||||
| Total Assets | 40.76B | 39.33B | 43.48B | 44.01B | 47.67B |
| Cash, Cash Equivalents and Short-Term Investments | 3.56B | 3.30B | 3.23B | 2.80B | 2.17B |
| Total Debt | 17.39B | 18.08B | 20.15B | 21.56B | 23.46B |
| Total Liabilities | 32.84B | 33.61B | 35.35B | 35.31B | 36.42B |
| Stockholders Equity | 7.91B | 5.37B | 7.51B | 7.90B | 10.28B |
Cash Flow | |||||
| Free Cash Flow | 2.56B | 749.00M | 842.00M | 1.04B | 236.00M |
| Operating Cash Flow | 3.10B | 1.25B | 1.37B | 1.59B | 798.00M |
| Investing Cash Flow | -557.47M | 792.00M | 968.00M | 656.00M | 1.52B |
| Financing Cash Flow | -2.29B | -1.79B | -1.91B | -1.49B | -2.17B |
Teva Technical Analysis
Positive
9672.00
Price Trends
10255.48
Positive
8975.23
Positive
7474.35
Positive
Market Momentum
129.59
Positive
54.01
Neutral
41.06
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IL:TEVA, the sentiment is Positive. The current price of 9672 is below the 20-day moving average (MA) of 10606.05, below the 50-day MA of 10255.48, and above the 200-day MA of 7474.35, indicating a neutral trend. The MACD of 129.59 indicates Positive momentum. The RSI at 54.01 is Neutral, neither overbought nor oversold. The STOCH value of 41.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IL:TEVA.
Teva Risk Analysis
Teva disclosed 42 risk factors in its most recent earnings report. Teva reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Teva Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | ₪1.51B | 64.00 | 10.95% | ― | 21.13% | 251.25% | |
73 Outperform | ₪1.66B | 22.61 | 7.86% | ― | 5.22% | 23.27% | |
64 Neutral | ₪1.26B | 609.51 | ― | ― | 29.55% | ― | |
63 Neutral | ₪123.45B | 25.39 | ― | ― | -5.10% | ― | |
57 Neutral | ₪602.83M | 48.56 | ― | 3.05% | 22.79% | ― | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% |
* Healthcare Sector Average
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.