Merrill Lynch today reiterated its "Buy" recommendation and $54 price target for Teva.
Merrill Lynch today reiterated its "Buy" recommendation and $54 price target for Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA), reflecting an 18% premium on yesterday's close of $46.77 on Nasdaq. Analysts Greg Gilbert and Haim Israel cut their earnings per share (EPS) forecasts for Teva to $2.69 for 2008 from $2.71. This revised figure does not include any contribution from Teva's acquisition of Barr Pharmaceuticals Inc. (NYSE: BRL). They also cut their EPS forecasts to $3.03 from $3.17 for 2009, but raised their 2010 forecast to $3.68 from $3.60 to account for Barr's contribution.
Gilbert and Israel assume that Teva will complete the Barr takeover during 2009, and that Teva will have to deal with its assumption of Barr's $1.88 billion debt and that Teva will issue $1.3 billion of new debt for the deal.
Gilbert and Israel believe that the cost of the Barr acquisition will burden Teva's results for 2009 but that Teva will begin to benefit in 2010 because it will have greater stability and a wider range of products. They assume synergies of $100 million in 2009 and $250 million in 2010, and $350 million a year in 2011-13 for Teva. "We continue to believe that the pending Barr transaction should solidify the 2009/2010 growth picture for Teva," they conclude.
Published by Globes [online], Israel business news - www.globes-online.com - on October 2, 2008
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008