Teva Pharmaceutical Expected to See Strong Revenue Growth in 2016



Strong revenue growth

In 2016, Teva Pharmaceutical (TEVA) expects to earn revenues of $22.0 billion–$22.5 billion. This outlook involves the contribution from Allergan Generics products. The company has also projected that its revenues will grow at a CAGR (compound average growth rate) of about 9% from 2015 to 2019. It expects revenues to be $26.7 billion–$27.8 billion in 2019.

Teva has also projected that its EBITDA (earnings before interest, tax, depreciation, and amortization) will be $10.7 billion–$11.5 billion in 2019, which is a CAGR of around 14%.

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Wall Street analysts have projected that in 2016, Teva Pharmaceutical’s revenues will reach about $22.4 billion. That’s a YoY (year-over-year) increase of about 13.8%. It’s also in line with guidance provided by the company in its 2Q16 earnings conference. Teva’s revenue is expected to increase further by about 16.1% YoY to reach approximately $26 billion in 2017.

If Teva Pharmaceutical manages to surpass this revenue target in 2016, it may boost the company’s share price. It could also positively impact the SPDR MSCI ACWI ex-US ETF (CWI). Teva makes up about 0.31% of CWI’s total portfolio holdings.

In 2016, Teva Pharmaceutical’s peers Akorn (AKRX), Mylan (MYL), and Pfizer (PFE) are expected to earn revenues of about $1.1 billion, $11.2 billion, and $52.8 billion, respectively.

Strong performance in 1H16

Teva Pharmaceutical managed to report robust revenues in the first half of 2016. It did this without any major product launches and despite the loss of exclusivity for aripiprazole, budesonide, and esomeprazole. Strong revenues were mainly due to the performance of the company’s generics, over-the-counter, and specialty businesses. Its strong business model is thus expected to be a key growth driver in the future.

In the next part of this series, we’ll analyze Teva Pharmaceutical’s proposed acquisition of Anda.


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