Credit Suisse sees 20% downside for Teva

Teva  photo: Reuters
Teva photo: Reuters

The investment bank recommends "underweight" for Teva's share.

At the beginning of the fourth quarter of 2017, analysts at the Credit Suisse investment bank published a review of prominent pharma companies, including Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA). The bank believes that sentiment towards pharma shares is by and large positive, but that there is still "noise," even if less than in the past, concerning the pricing of drugs in the US market.

Where Teva is concerned, Credit Suisse writes that investors' main question obviously concerns the current process that the company is currently going through. "We are "Underperform" rated on TEVA, but encouraged by the appointment of Kare Schultz as the new CEO, given his background and track record of success at Lundbeck and Novo Nordisk." At the same time, Credit Suisse goes on to write, "Teva is a different story than those two companies and facing unique challenges, especially as it relates to the generics industry, where Schultz has less experience."

Credit Suisse mentions the measures being taken by Teva's current management (under acting CEO Yitzhak Peterburg). Teva recently announced the sale of its women's health activity and an agreement with its lending banks on revisions in the agreements for its bank loans totaling $10.9 million. Credit Suisse's economists comment, "The steps the current team are taking to sell off assets (at higher valuations than we expected) and pay off debt are also positives, but we wait for Schultz to take over as the CEO (presumably by year end) and lay out his plans for overcoming the challenges the generics industry is facing."

Credit Suisse's target price for Teva's share is $14, 20.5% lower than the current price, which reflects a $17.9 billion market cap.

Published by Globes [online], Israel Business News - www.globes-online.com - on October 3, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017 .

Teva  photo: Reuters
Teva photo: Reuters
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