Deutsche Bank Downgrades Teva Pharmaceutical (TEVA) to Hold
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Deutsche Bank downgrades Teva Pharmaceutical (Nasdaq: TEVA) from Buy to Hold with a $47 price target, after FORTE trial fails.
The firm noted the 40mg dosage strength of Copaxone was safe but did not demonstrate increased efficacy over the 20mg dosage strength. They said a positive result was largely expected.
The firm said, "While we continue to believe that Teva remains the top generic drug company in the sector for a host of reasons, including management’s excellent track record of execution—after 6 and a half years with a Buy rating, we are downgrading Teva’s shares as we no longer think the current outlook merits a premium to the forward growth rate, largely due to Copaxone related concerns. Our previous 12-month price target was based on a 17.5x multiple (17% premium Teva’s forward growth rate). We now believe Teva should trade in-line with its forward growth rate. Hence, based on a 15x multiple on our ’09 EPS est of $3.12, our new 12-month price target is $47."
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