BTIG Sees Strong Valuation in Teva Pharma (TEVA), Recommends to Buy on Weakness

BTIG affirms its Buy rating and $77 price target on Teva Pharma (NYSE: TEVA), saying recent weakness creates a buying opportunity for the stock as valuation remains strong.

Analyst Timothy Chiang noted the following key points:

• We believe the main focus remains on Teva..s pending ~$40B purchase of Allergan..s (AGN, Not Rated) generic segment, which is targeted to close in 1Q16. To finance this purchase, Teva has ~$34B of committed bridge financing at interest rates of just ~1.25% -1.5%. In addition, Teva plans on issuing 200-210M shares, which we estimate would increase the share count to ~1.056B (from ~852M currently).
• Yesterday, Teva announced the $2.3B acquisition of Rimsa, which will add manufacturing and distribution capabilities into Mexico. We estimate Teva is paying ~10x trailing 2014 sales. While this deal is not expected to generate EPS accretion until 1Q17, we do see this purchase as a nice tuck-in acquisition. We believe Rimsa..s products have higher than average gross margins (more in line with specialty products; we est. in the ~70 to 80% range).

For an analyst ratings summary and ratings history on Teva Pharma click here. For more ratings news on Teva Pharma click here.

You May Also Be Interested In

• Northwest Bancshares, Inc. (NWBI) PT Lowered to $10 at Piper Sandler
• Adriatic Metals PLC (ADT1:LN) PT Raised to GBP2.75 at Stifel
• AZZ Inc. (AZZ) PT Raised to $85 at B.Riley