Leader: Teva should be the basis of any portfolio

Leader has rated Teva’s stock “Buy” and set a target price of $45.

Leader Capital Markets has published an updated rating for Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA). Leader now rates Teva “Buy” and has set a target price target price of $45, 25.7% higher than its current market price.

Teva ended Friday’s session on Wall Street with a market cap in excess of $27 billion, and an earnings before interest, taxation, depreciation and amortization (EBITDA) multiple of 11.

Leader says that anyone wishing to buy Teva can expect to pay a premium of 50% on the current market price, reflecting a market cap of more than $40 for the company. Leader notes that Teva and its chairman Eli Hurvitz stand apart from the rest of the market due to their skill in long-term planning and execution, and their ability to accurately predict market developments. They are also unique for their approach that sees shareholders as real partners who are entitled to a share in the company’s potential by way of convertible bonds, and gives them priority over considerations of stock dilutions, control groups and capital structures.

Leader notes that it last upgraded its rating for Teva at more or less the current price levels 18 months ago, and that the share had experienced some turbulence since then. Despite this, 2008 will soon become the “next year” following which the market will awaken to a new reality that will see Teva traded at a multiple of 13, and a multiple of 12 for the year after that. The combination of a low-price share (at current multiples) with a quality management team has created a real opportunity. Leader says that Teva should be the basis of any portfolio in 2007, whether the investors in question are speculators looking for a quick profit from the higher multiples, or pension funds looking for a top-quality management team that plans for the long-term and acts accordingly.

Published by Globes [online], Israel business news - www.globes.co.il - on October 9, 2006

© Copyright of Globes Publisher Itonut (1983) Ltd. 2006

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