In an unusual move, Citigroup published its third recommendation for Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) within a week last Thursday. In the first report, Citigroup gave a price target of $51 for Teva, a premium of 60% above its market price at the time. Citigroup mentioned worries arising about pharmaceutical companies cutting prices for their ethical drugs. Citigroup kept its “Buy” recommendation for Teva and target price for the share.
The second update came after Teva won exclusive marketing rights for generic Zoloft, an antidepressant. Branded Zoloft has $3 billion in annual sales in the US. In this report, published early last week, Citigroup kept its “Buy” recommendation for Teva and target price of $51 per share.
Citigroup is apparently working hard to update investors, publishing its third report on Teva within a week on Thursday. The most importance difference between the latest report and its two predecessors is that Citigroup cut its target price for Teva to $46, 32% above Teva’s current market price. Citigroup kept its “Buy” recommendation for the share, however.
Citigroup also raised its earnings per share forecast for 2006 for Teva by 6% to $1.98, but cut its forecast by 2% to $2.11 for 2007, and by 3% to $2.59 for 2008.
Citigroup repeated its warning to investors about aggressive pricing by pharmaceutical companies for their branded drugs, but also reiterated that Teva was one of the best and strongest generic drug companies on the market.
Published by Globes [online], Israel business news - www.globes.co.il - on July 9, 2006
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