Piper Jaffray Remains Sidelined on Teva Pharma (TEVA) Following 1Q - PT to $58

Piper Jaffray maintained a Neutral rating on Teva Pharma (NYSE: TEVA), and cut the price target to $58.00 (from $59.00), following the company's 1Q earnings report. TEVA reported a non-GAAP EPS of $1.20 on revenues of $4.81B, ahead of the Street's estimates of $1.17 and $4.77B, respectively. Management noted that companies with older, more commodity-focused portfolios should expect to experience price/margin erosion.

Analyst David Amsellem commented, "Teva reported 1Q16 non-GAAP EPS of $1.20 on revenues of $4.81B, north of the Street estimates of $1.17 and $4.77B, respectively. With the pressures across the generics space now well-documented, Teva made what in our view were cogent arguments for how the combined Teva/Actavis entity can generate sustainable cash generation (i.e., deep generics R&D and significant exposure to more complex dosage forms). That said, we remain cautious on the shares, given that the inevitable pressure on older, commodity generics and continued uncertainty over the trajectory of Copaxone translates into murky visibility on meaningful longer-term growth. Those dynamics along with the backdrop of relatively high debt levels once the Actavis transaction closes (pro forma debt/EBITDA of around 4x) translate into limited potential significant value creation for now. We reiterate our Neutral rating and are slightly lowering our PT to $58 from $59, owing to modest estimate revisions."

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 $52.81 yesterday.

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