Wells Fargo Cuts Valuation Range on Teva Pharma (TEVA) But Remains Bullish

Wells Fargo is reaffirming its Outperform rating on shares of Teva Pharma (NASDAQ: TEVA), but is lowering its price valuation range from $51-$54 to $50-$53 as management released its 2012 cash EPS guidance below expectations.

The company's 2012 cash EPS guidance of $5.48-$5.68 on $22 billion in total sales caused the firm to lower its estimate from $5.74 to $5.60. Wells Fargo also reduced its sales estimate from $22.7 billion to $21.9 billion for the year.

Management also announced the Board approved a three year $3 billion buyback plan which should help drive sustainable earnings growth on a per share basis.

An analyst at Wells Fargo comments, "2012 guidance is below our expectations despite generic rebound and peak Copaxone sales. That said, we think management set guidance that should be achievable and that the implied decline in operating leverage should reset in 2013 and beyond while the $3B share buyback provides further support. We continue to find TEVA the best-in-class generic pharma with positioning in both branded pharmaceuticals and biosimilars that should drive growth post-patent cliff."

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 $42.34 yesterday.

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