Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA), the world’s largest generic drug maker, just announced Q1 results and analysts were left with mixed feelings about the company’s latest numbers.
Teva Pharmaceutical in the News
On Thursday May 1, Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) announced their first-quarter results, revealing an 18% increase in net income to $744 million from $6330 million last year. Teva did report higher quarterly earnings that beat analysts’ estimates by one cent, but analysts also expected a revenue of $5.1 billion, and the company came up short with $5.0 billion. International sales of Copaxone, Teva’s multiple sclerosis drug which accounts for 20% of its sales and 50% of profit, increased by 1% to $1.07 billion. However, the drug will face some upcoming competition from oral treatments and cheaper generics. It looks like Teva is on the right track, but competition is in the air.
An Analyst Perspective
Following the report, Sterne Agee analyst Shibani Malhotra reiterated her HOLD rating and $53.00 price target on Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA). Shibani noted, “It was very reassuring to hear Teva’s new CEO, Erez Vigodman, on the earnings call discussing the company’s transformation and focus on getting Teva’s house in order, but we believe that he must execute on such plans before investors get more excited about the stock. We remain on the sidelines for now, given uncertainty around the approval and launch potential of Copaxone generics in late May 2014.” Based on the vulnerable state of Copaxone due to competition, Shibani is moving forward with caution and a HOLD rating. Shibani has a +4.3% average return and a 70% success rate recommending stocks.
Shibani Malhotra’s Past Recommendations
Shibani has a strong history recommending biopharmaceutical companies, including Allergan, Inc. (NYSE:AGN) and Mylan Inc (NASDAQ:MYL).
Shibani has a 67% success rate recommending Allergan, Inc. (NYSE:AGN) and a +6.3% average return over S&P 500 (INDEXSP:.INX) on the stock. Her latest recommendation to BUY Allergan from April 16 is just one example of her successful Allergan recommendations. Shibani stated that “Allergan is one of the best companies in our space.” Shibani’s BUY recommendation earned her +28.2% over S&P-500 while Shibani’s recommendation to BUY Allergan from January of this year earned her +6.4% over S&P-500.
In May of 2012, Shibani recommended BUY Mylan Inc (NASDAQ:MYL), a global generic pharmaceutical company, and raised her price target from $25.00 to $26.00. After the company announced that it was increasing its 2012 EPS guidance to $2.45-$2.55 from their previous forecast of $2.30-$2.50, Shibani was ready to recommend BUY. At the time, Shibani viewed Mylan, “as one of the best positioned generic companies on a fundamental basis given its broad global portfolio, low cost manufacturing and focus on quality and reliability.” This recommendation earned her +4.1% over S&P-500.
Most recently, on May 1, Shibani recommended BUY Endo International PLC (NASDAQ:ENDP), an American pharmaceutical company, with a $66 price target. Shibani made her recommendation right after the company announced it had settled most of the AMS-related claims for $830 million. Shibani noted, “the settlement came in earlier than expected and the amount is lower than we expected, further strengthening our conviction in this execution-focused management team. Given that the uncertainty around the size of the potential liability has been a major overhang for the stock, we see the removal of this as a major driver of outperformance over the next 12 months.” Right now Shibani’s recommendation has lost her -0.7% over S&P-500, but she still has time to see the stock turn around. Shibani has +2.0% average return over S&P 500 (INDEXSP:.INX) on ENDP recommendations.
Shibani appears to have a strong history with the biopharmaceutical industry, but will you trust her latest HOLD Teva advice?
Jordan Faigen covers financial markets and the latest stock market news. She can be reached at [email protected]