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Teva Pharmaceutical Industries Limited (IL:TEVA)
:TEVA
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Teva
(TEVA)
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Rating:61Neutral
Price Target:
10,504.00
▲(8.60% Upside)
Teva's overall stock score reflects strong technical momentum and positive earnings call insights, tempered by financial performance challenges and valuation concerns. The company's ability to sustain growth in innovative products and reduce debt are key positives, while high leverage and profitability issues remain significant risks.
Positive Factors
Growing innovative product franchise
Sustained rapid growth in AUSTEDO, UZEDY and AJOVY reflects durable demand for Teva’s specialty portfolio. A larger innovative mix reduces reliance on low‑margin generics, supports higher gross margins, and creates recurring, higher‑value revenue that can fund R&D and commercialization over years.
Material deleveraging progress
Meaningful reduction in net leverage improves financial flexibility, lowers interest burden, and strengthens ability to invest in pipeline and transformation programs. Achieving sub‑3x leverage is a durable improvement that reduces refinancing risk and supports long‑term strategic optionality.
Expanding biosimilars and late‑stage pipeline
Growing biosimilars launches and multiple late‑stage assets diversify Teva’s product base and target high‑value markets. Successful biosimilar commercialization and late‑stage readouts create scalable, recurring revenue sources and leverage existing manufacturing, providing durable upside beyond generics volume cycles.
Negative Factors
High leverage remains elevated
Despite recent deleveraging, a debt‑to‑equity above 2.5 signals persistent capital structure risk. Elevated leverage increases sensitivity to interest rates and cash‑flow volatility, constrains capital allocation flexibility, and may limit investment in R&D or M&A over the medium term if cash generation slows.
Free cash flow volatility
Material quarter‑to‑quarter FCF declines, driven by timing and settlements, indicate cash conversion can be lumpy. Volatile free cash flow undermines predictable deleveraging and reinvestment plans, making it harder to sustainably hit targets like FCF >$2.7B in FY27 without consistent operating cash generation.
Generics volatility and execution risk
Exposure to generics and tender markets creates structural revenue and margin volatility. Declines in TAPI and Europe, plus inability to complete the TAPI divestiture, show execution and market challenges that could prolong earnings cyclicality and hinder the strategic shift toward higher‑margin biopharma.
Teva (TEVA) vs. iShares MSCI Israel ETF (EIS)
Market Cap
₪114.18B
Dividend YieldN/A
Average Volume (3M)1.92M
Price to Earnings (P/E)23.9
Beta (1Y)0.61
Revenue Growth-5.10%
EPS GrowthN/A
CountryUS
Employees37,000
SectorHealthcare
Sector Strength45
IndustryDrug Manufacturers - Specialty & Generic
Share Statistics
EPS (TTM)297.30
Shares Outstanding1,146,838,700
10 Day Avg. Volume1,312,069
30 Day Avg. Volume1,917,294
Financial Highlights & Ratios
PEG Ratio-0.08
Price to Book (P/B)4.70
Price to Sales (P/S)1.53
P/FCF Ratio33.70
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
Mixed fundamentals: positive TTM revenue growth and decent cash conversion, but profitability remains weak (negative net margins) and leverage is high (debt-to-equity >2.5) with negative ROE.Income Statement
Teva's income statement shows a mixed performance. The company has achieved positive revenue growth in the TTM period, indicating a recovery from previous declines. However, profitability remains a concern with negative net profit margins and fluctuating EBIT margins over the years. The gross profit margin is stable but not exceptional for the industry.55
Neutral
Balance Sheet
The balance sheet reflects high leverage with a debt-to-equity ratio exceeding 2.5, which poses a risk in terms of financial stability. Return on equity is negative, indicating challenges in generating returns for shareholders. The equity ratio is moderate, suggesting some level of financial stability but with room for improvement.45
Neutral
Cash Flow
Cash flow analysis reveals declining free cash flow growth, which is concerning. However, the operating cash flow to net income ratio is positive, indicating some efficiency in cash generation relative to net income. The free cash flow to net income ratio is relatively healthy, suggesting that the company is able to convert a portion of its earnings into cash.50
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 16.78B | 16.54B | 15.85B | 14.93B | 15.88B | 16.66B |
| Gross Profit | 8.40B | 8.06B | 7.65B | 6.97B | 7.59B | 7.72B |
| EBITDA | 2.79B | 777.00M | 1.56B | -925.00M | 2.88B | -1.95B |
| Net Income | 712.00M | -1.64B | -559.00M | -2.35B | 417.00M | -3.99B |
Balance Sheet | ||||||
| Total Assets | 39.86B | 39.33B | 43.48B | 44.01B | 47.67B | 50.64B |
| Cash, Cash Equivalents and Short-Term Investments | 2.20B | 3.30B | 3.23B | 2.80B | 2.17B | 2.18B |
| Total Debt | 17.09B | 18.08B | 20.15B | 21.56B | 23.46B | 26.40B |
| Total Liabilities | 32.60B | 33.61B | 35.35B | 35.31B | 36.42B | 39.58B |
| Stockholders Equity | 7.25B | 5.37B | 7.51B | 7.90B | 10.28B | 10.03B |
Cash Flow | ||||||
| Free Cash Flow | 578.00M | 749.00M | 842.00M | 1.04B | 236.00M | 638.00M |
| Operating Cash Flow | 1.07B | 1.25B | 1.37B | 1.59B | 798.00M | 1.22B |
| Investing Cash Flow | 774.00M | 792.00M | 968.00M | 656.00M | 1.52B | 863.00M |
| Financing Cash Flow | -2.87B | -1.79B | -1.91B | -1.49B | -2.17B | -1.89B |
Teva Technical Analysis
Neutral
9672.00
Price Trends
9562.86
Positive
8153.71
Positive
6959.77
Positive
Market Momentum
91.09
Positive
50.13
Neutral
48.48
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IL:TEVA, the sentiment is Neutral. The current price of 9672 is below the 20-day moving average (MA) of 10082.80, above the 50-day MA of 9562.86, and above the 200-day MA of 6959.77, indicating a neutral trend. The MACD of 91.09 indicates Positive momentum. The RSI at 50.13 is Neutral, neither overbought nor oversold. The STOCH value of 48.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 | ₪1.53B | 65.56 | 10.95% | ― | 21.13% | 251.25% | |
73 Outperform | $1.56B | 21.39 | 7.86% | ― | 5.22% | 23.27% | |
64 Neutral | ₪1.30B | 644.57 | ― | ― | 29.55% | ― | |
61 Neutral | ₪114.18B | 23.94 | ― | ― | -5.10% | ― | |
57 Neutral | ₪640.13M | 51.56 | ― | 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.