Are Teva Pharmaceutical’s Earnings Attractive to Investors?

Earnings performance in 2018

In its fourth-quarter earnings investor presentation, Teva Pharmaceutical (TEVA) guided for non-GAAP (generally accepted accounting principles) EPS of $2.20–$2.50 and 1.096 billion shares outstanding for 2019. The company has also guided for operating income and EBITDA in the range of $3.8 billion–$4.2 billion and $4.4 billion–$4.8 billion, respectively.

Teva Pharmaceutical also guided for a revenue impact of -$100 million on its operating profit.

Are Teva Pharmaceutical’s Earnings Attractive to Investors?

Analysts expect Teva Pharmaceutical’s non-GAAP EPS to fall 38.78% YoY (year-over-year) to $0.58 in the first quarter and 13.87% YoY to $2.51 in 2019. They then expect it to rise 6.30% YoY to $2.67 in 2020 and 7.17% YoY to $2.87 in 2021.

Performance in 2018

In 2018, Teva Pharmaceutical reported non-GAAP EPS of $2.92, a YoY fall of 15.77% but in line with its latest guidance. In 2018, the company reported multiple upward revisions to its 2018 non-GAAP EPS guidance, from $2.25–$2.50 in February to $2.40–$2.65 in May to $2.55–$2.80 in August and finally to $2.80–$2.95 in November.

In 2018, Teva reported non-GAAP operating income of $4.7 billion, in line with the latest guidance provided by the company. In 2018, the company reported multiple upward revisions to its 2018 non-GAAP operating income guidance, from $4.0 billion–$4.3 billion in February to $4.2 billion–$4.5 billion in May to $4.3 billion–$4.6 billion in August and finally to $4.6 billion–$4.8 billion in November.

In 2018, Teva reported non-GAAP EBITDA of $5.32 billion, a YoY fall of 33.31% and in line with its latest guidance. In 2018, the company reported multiple upward revisions to its 2018 non-GAAP EBITDA guidance, from $4.7 billion–$5.0 billion in February to $4.9 billion–$5.2 billion in May to $5.0 billion–$5.3 billion in August and finally to $5.2 billion–$5.4 billion in November.

Next, we’ll discuss expense projections for Teva Pharmaceutical in 2019.