Analysts’ recommendations for Teva Pharmaceutical
Following the completion of its acquisition of Allergan’s Actavis Generics business on August 2, 2016, Teva Pharmaceutical (TEVA) plans to focus on realizing the deal’s synergies in 2017. To know more about these synergies, read Teva Aims to Improve Its Position with Actavis Generics Acquisition.
To better represent its business, Teva has revamped its reporting segments. The company will report its financial performance across two segments: Generics and OTC (over-the-counter) and Specialty.
In addition to prioritizing the Actavis Generics deal, the company is also focused on successfully implementing the commercial launches of its generic and specialty products scheduled for 2017. Teva also aims to generate substantial cash flow in 2017, which should enable it to rapidly deleverage its balance sheet.
If Teva Pharmaceutical manages to implement its 2017 strategy, its share price could see a boost, as could the price of the VanEck Vectors Pharmaceutical ETF (PPH). Teva Pharmaceutical makes up ~4.2% of PPH’s total portfolio holdings.
Of the two analysts covering Teva Pharmaceutical in February 2017, one has rated the company as a “buy,” and the other has rated it as a “hold.”
The company’s share price continued to suffer in 2016, mainly due to its excessive reliance on the Copaxone franchise, which accounted for 43% of its operating profit in the year before general and administrative (or G&A) expenses.
On January 30, 2017, the District of Delaware invalidated four out of the five Orange Book patents belonging to Copaxone 40mg/ml. While Teva Pharmaceutical plans to appeal this decision, it’s increased the probability of generic competition for this version of Copaxone in 2017.
Of the 22 analysts covering Mylan (MYL) in February 2017, ~64% have rated the company as a “buy.” Approximately 52% of the 23 analysts covering Pfizer (PFE) have given it “buy” recommendations this month, and ~45% of the 29 analysts covering GlaxoSmithKline (GSK) have given it “buy” recommendations this month.
In the next article, we’ll discuss 2017 revenue projections for Teva Pharmaceutical in greater detail.