National Alliance Capital Starts Teva Pharma (TEVA) at Buy

National Alliance Capital initiated coverage on Teva Pharma (NYSE: TEVA) with a Buy rating and a price target of $64.00.

Analyst Corey Davis said, "Our BUY rating on TEVA emanates from: 1) it did not participate in the large run that many of its peers had last year; 2) now has the most momentum; 3) carries the lowest valuation in the group; 4) has the best chance for a “turnaround”; and 4) because we think the chance for generic Copaxone in May is remote. However, if we’re wrong on #4, we see little downside since most already see it as the #1 risk."

"Copaxone has been discussed ad nauseum, but since it was ~74% of net income in ‘13, and we’ve modeled it (with no generics) to be 60% of ’14 net income, this is warranted. With the Supreme Court case in Oct., and inherent complexities of approving generics, we doubt generics are coming in May. This gives more time to switch to the 3x-weekly 40 mg; with new Rx’s >50% conversion, we see total conversion > 50% by year end. Even a steady Copaxone decline should still allow total Teva revenue and EPS to be flat for years, with free cash flow ~$3-4B/year," he added.

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 $53.00 yesterday.

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