Teva Pharma (TEVA): Cutting Estimates But Thesis Intact; Reit Buy - Guggenheim
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Guggenheim analyst, Louise Chen, cut estimates while reiterating her Buy rating and price target of $80 on shares of Teva Pharma (NYSE: TEVA). The analyst sees several headwinds to sales and earnings in 2H16 that were not previously anticipated.
That said, the analyst believes her investment thesis for TEVA remains intact, and she continues to expect multiple expansion to drive TEVA shares higher. She believes TEVA's ability to integrate the AGN (NYSE: AGN) generics deal, and advance its brand drug pipeline are still underappreciated.
The risk/reward for TEVA is skewed to the upside, because the Street is pricing in the worst case outcome for TEVA in '16+ which is:
1) generic competition for Copaxone 40mg by '18
2) generic drug price erosion will get worse in '17
3) TEVA cannot grow generic sales 5% annually
Shares of Teva Pharma closed at $45.68 yesterday.
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