Merrill Lynch and WR Hambrecht & Co. have published new reviews on Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) following the publication of the company’s financial report for the third quarter yesterday. The two investment houses have divergent views on the company.
WR Hambrecht notes that Teva’s “2008-10 war plan, which is now being finalized, will likely include at least one strategic acquisition… We continue to view Impax Laboratories Inc. (Pink Sheets:IPXL) as a near-term M&A target… and a possible modest European target, which could include Germany (smaller and far less expensive that Merck KgGA (XETRA:MRK), which Mylan Laboratories Inc. (NYSE:MYL) clearly overpaid for).”
WR Hambrecht points out that "Teva is already Impax's distribution partner for most approved products, but does not have the rights to some of the pipeline."
WR Hambrecht also predicts that Teva will raise the lower end of its guidance from $2.50 earnings per share (EPS) on $10 billion revenue, which reflect 8% revenue and 12% EPS growth.
WR Hambrecht reiterated its “Buy” recommendation for Teva, and while it reiterated its 2007 forecasts of $2.30 EPS on $9.31 billion revenue, it raised its 2008 forecast to $2.65 EPS from $2.59 and its revenue forecast to $10.5 billion from $10.1 billion.
Merrill Lynch said that Teva’s results were in line with its forecasts, and reiterated its “Neutral/high risk” recommendation for the share. The investment bank also cut its profit forecasts to $2.34 per share in 2007 from $2.36, and to $2.56 in 2008 $2.60), mainly because of lower Copaxone sales estimates.
Merrill Lynch sums up, “While management did not raise its 2007 outlook, potentially resetting some investors’ (high) expectations, we continue to believe that the stock could do well (especially if generic Protonix is launched or monetized, and generic Lotrel enjoys extended exclusivity). We maintain our ‘Neutral’ rating as we believe that most investors already expect Teva to execute well and beat estimates.”
Published by Globes [online], Israel business news - www.globes.co.il - on October 31, 2007
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