Credit Suisse slashes Teva target price to $8

Teva  photo: PR

The investment bank believes that the negative trend in Teva's share price will continue.

Investment bank Credit Suisse has slashed its target price for Teva Pharmaceutical Industries Ltd.'s (NYSE: TEVA; TASE: TEVA) share from $14 to $8, while retaining its "Underperform" recommendation. The new target price is 29.8% lower than the current market price, and reflects a market cap of only $8.1 billion for Teva.

Credit Suisse analyst Vamil Divan writes, "The lack of insight is still frustrating," and predicts that the negative momentum in the share will persist in the coming weeks and months while investors wait for new Teva CEO Kare Schultz to revise the company's strategic plan.

Divan has cut his estimated net profit for Teva in 2017-2019 by an average of 12%, forecasting profit per share of $3.74 in 2017, $2.61 in 2018, and $2.93 in 2019. A floor of $5 per share for Teva's profit was once mentioned, but has long since ceased to be relevant.

With respect to Schultz, Divan writes, "Based on the background and prior successes of new CEO Kare Schultz, we remain hopeful that he will be able to put together a reasonable plan that can get Teva on the road to recovery." He mentions that Teva is taking measures to reduce its debt, but says that with the current challenges from generic Copaxone and pressures on generics business in the US, the process is becoming more difficult. "There are multiple levers the company could pull to try and address these issues, including reducing operating expenses, renegotiating loan terms, eliminating the dividend, offering additional equity or divesting more non-core assets," Divan comments. "We appreciate the company is re-evaluating every corner of the business and considering all possibilities."

Published by Globes [online], Israel Business News - www.globes-online.com - on November 6, 2017

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

5 Comments
View comments in rows
Update by email about comments talkback
POST
Comments
Teva  photo: PR
Teva photo: PR
Twitter Facebook Linkedin RSS Newsletters גלובס MAD Conference 2017