Piper Jaffray Cuts Price Target on Teva Pharma (TEVA) Following Guidance Update
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Piper Jaffray maintained a Neutral rating on Teva Pharma (NYSE: TEVA), and cut the price target to $55.00 (from $58.00), following the company's guidance updates. 2Q EPS and revenues are expected to be in the range of $1.19-$1.22 and $4.9B-$5.0B, compared to its previously stated expectations of $1.16-$1.20 and $4.8B-$4.9B, respectively. Management also noted that its 2019 revenue target range of $26.7B-$27.8B reflects an erosion of $200M-$300M per year from 2016 through 2019 related to generic competition on the once-daily form of Copaxone.
Analyst David Amsellem commented, "Teva announced that 2Q16 non-GAAP EPS will be in the range of $1.19-$1.22 on revenues of $4.9B-$5.0B, compared to its previously stated expectations of $1.16-$1.20 and $4.8B-$4.9B, respectively. Notably, management stated that it did not see further pricing pressure on the overall generics business. Though that may ease recent worries regarding the near-term trajectory of the business, we continue to believe that the longer-term outlook for the generics business as well as the brand business (namely Copaxone) is murky, and further believe that TEVA's long-term (LT) guidance targets set a particularly high bar (especially considering that they do not reflect generic competition on Copaxone 40 mg). With TEVA at a pro forma 2017 P/E and EV/EBITDA of 9x and 10x, respectively, we believe the shares are fully valued. We reiterate our Neutral rating and lower our PT to $55 from $58."
For an analyst ratings summary and ratings history on Teva Pharma click here. For more ratings news on Teva Pharma click here.
Shares of Teva Pharma closed at $54.46 yesterday.
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