Barclays Capital analyst Richard Silver advises continuing aggressive purchasing of Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) shares through the end of the year. He is confident in the company's strong long-term growth outlook through 2015.
Silver reiterated his "Overweight" recommendation for Teva and target price of $66. He also reiterated his earning per share forecasts of $3.35 for 2009 and $4.52 for 2010. Teva's share closed at $55.98 on Nasdaq yesterday, and rose a further 0.5% by early afternoon on the TASE today to NIS 214.10, following the announcement of a relatively small - $100 million - acquisition in Japan.
Silver predicts that 2011 will be a growth year for Teva. At the company's upcoming analysts meeting on January 7, he expects Teva to update its 2012 business plan to include Barr Pharmaceuticals and to update its revenue guidance. He believes that Teva's management will heed investors' requests for more specifics about the company's business outside the US, which will explain how the company expects to meet its 2012 goal of $20 billion revenue and 20% net profit margin.
The current analysts' consensus is a net profit of $5.04 billion on $18.7 billion revenue in 2012. Barclays' forecast is slightly higher: a net profit of $5.064 billion on $19.4 billion revenue, a net profit margin of 26.6%.
Silver says that Teva will see accelerated earnings in 2010, including significant contributions from exclusive launches of generic Mirapex and Effexor XR, as well as the benefit of US Copaxone profit since Teva now records all profit from the drug, instead of sharing it with Sanofi-Aventis SA (NYSE: SNY; Euronext: SAN).
As for Copaxone, Silver says that if the results from a recently-completed six-month pain perception study prove positive of a low dosage version (0.5 ml instead of 1 ml), Teva may have the potential to improve the competitive profile of Copaxone. He adds that regulatory barriers-to-entry are formidable, and will help Teva keep generic versions of the multiple sclerosis drug off the market for now.
Published by Globes [online], Israel business news - www.globes-online.com - on December 24, 2009
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