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Teva Stock Has Risen Significantly since November Lows: What’s Next?

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Dec. 4 2020, Updated 10:51 a.m. ET

Teva’s recent trading activity

On January 5, 2018, Teva Pharmaceuticals (TEVA) closed at $19.2 per share. The stock closed ~77% higher than its 52-week low of $10.8 reported on November 2, 2017. Teva Pharmaceuticals released its 3Q17 earnings results on November 2, 2017. The disappointing earnings and the company’s lowering of its fiscal 2017 guidance triggered negative investor sentiments, which led to a massive decline of approximately 20% in TEVA stock prices. The company has run into troubles over the past year and it reported a dismal performance in 3Q17. For details, read, Inside Teva’s 3Q17 Performance. The company traded at its 52-week high on February 21, 2017, at a price of $37.9 per share.

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In December 2018, however, the company’s stock price picked up momentum and has recovered by more than 77% from its lows in November due to the positive investor sentiments around the company’s potential turnaround driven by its recent announcement regarding the company’s cost-cutting measures and potential savings from mass layoffs.

The company went through management changes in September 2017. With the appointment of its new CEO, Teva announced a massive restructuring plan that consisted of huge layoffs, a change in organizational structure, and cost-cutting measures with a focus on research and development.

TEVA stock is currently trading above its 50-day moving average of $16.6 but slightly below its 200-day moving average of $19.5.

Comparison with industry and market performances

Over the last one year, Teva Pharmaceuticals stock has fallen more than 45%, while the broader market has registered growth of about 20%. The company largely underperformed its peers and industry average. The Health Care Select Sector SPDR Fund (XLV) has generated a return of approximately 20.2% over the last 12 months.

As of January 8, 2018, Teva’s peers Mylan (MYL), Pfizer (PFE), and GlaxoSmithKline (GSK) had returns of approximately 15.7%, 10.1%, and -4.7%, respectively, over the last one year.

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