Teva Pharmaceutical Industries Limited - NYSE:TEVA - Comprehensive analysis
We believe Teva Pharmaceuticals is an attractive investment opportunity, currently trading at approximately a 25% discount to our fair value estimate of $23 per share. As one of the leading generic drug manufacturers globally, Teva boasts a growing innovative portfolio that includes several promising pipeline assets. Our valuation is supported by a no-moat rating, a projected 3% compound annual growth rate for revenue over the next 10 years, and anticipated mild margin expansion throughout our forecast period. Our fair value estimate corresponds to 9 times our adjusted EPS estimate of $2.55 for 2025. Currently, over 60% of Teva's total revenue is derived from generics and off-patent branded drugs; however, we expect this percentage to decline as Teva’s innovative commercial drugs surpass its legacy products and as pipeline candidates successfully enter the market. The company has a robust presence in neuroscience with products like Austedo, Ajovy, and Uzedy, and we anticipate that this portfolio will be enhanced by the expected launch of olanzapine in late 2027. Teva is also making strides in immunology with candidates such as duvakitug (for inflammatory bowel disease), a dual-action rescue inhaler (for asthma), and an anti IL-15 treatment (for celiac disease), all of which we expect to launch by 2030. We believe these initiatives will contribute to sustainable long-term revenue growth, improve profitability, and assist in reducing its $16 billion debt. Geographically, Teva is well-positioned, with the US accounting for approximately 50% of sales, Europe 33%, and the remaining 17% from international markets. We believe that the company's commercial expertise in each market will facilitate the successful launch of both generic and branded products.
Free evaluation through quantitative algorithms Teva Pharmaceutical Industries Limited - NYSE:TEVA
Growth-Scoring Model Detail
Total Revenue Growth Over Prior Year | 4.4 | Market 50 Sector 54 |
Gross Profit Growth Over Prior Year | 5.45 | Market 48 Sector 55 |
EBITDA Growth Over Prior Year | 2.26 | Market 32 Sector 45 |
EBITA Growth Over Prior Year | 4.32 | Market 44 Sector 43 |
EBIT Growth Over Prior Year | 6.04 | Market 46 Sector 47 |
Earnings from Cont. Ops. Growth Over Prior Year | 0 | Market 0 Sector 0 |
Net Income Growth Over Prior Year | 0 | Market 0 Sector 0 |
Normalized Net Income Growth Over Prior Year | 31.1 | Market 83 Sector 67 |
Diluted EPS before Extra Growth Over Prior Year | 0 | Market 0 Sector 0 |
A/R Growth Over Prior Year | -10.24 | Market 11 Sector 15 |
Inventory Growth Over Prior Year | -25.22 | Market 2 Sector 7 |
PPE Net Growth Over Prior Year | -19.51 | Market 3 Sector 23 |
Total Assets Growth Over Prior Year | -9.55 | Market 6 Sector 32 |
Tangible Book Value Growth Over Prior Year | 0 | Market 0 Sector 0 |
Common Equity Growth Over Prior Year | -28.42 | Market 4 Sector 21 |
Cash from Ops. Growth Over Prior Year | -8.85 | Market 26 Sector 28 |
CAPEX Growth Over Prior Year | -5.32 | Market 28 Sector 45 |
Dividend per Share Growth Over Prior Year | 0 | Market 36 Sector 48 |
Levered Free Cash Flow Growth Over Prior Year | -20.4 | Market 18 Sector 24 |
Unlevered Free Cash Flow Growth Over Prior Year | -17.5 | Market 20 Sector 23 |
Profitability-Scoring Model Detail
Gross Margin % | 48.7 | Market 59 Sector 49 |
SG&A Margin % | 22.4 | Market 70 Sector 35 |
EBITDA Margin % | 26.8 | Market 55 Sector 90 |
EBITA Margin % | 23.9 | Market 66 Sector 90 |
EBIT Margin % | 20.4 | Market 57 Sector 90 |
Earnings from Cont. Ops Margin % | -11.84 | Market 3 Sector 32 |
Net Income Margin % | -9.91 | Market 3 Sector 35 |
Net Income Avail. for Common Margin % | -9.91 | Market 3 Sector 35 |
Normalized Net Income Margin % | 10.97 | Market 56 Sector 90 |
Levered Free Cash Flow Margin % | 15.85 | Market 68 Sector 88 |
Unlevered Free Cash Flow Margin % | 19.64 | Market 73 Sector 90 |
Return on Assets % | 5.09 | Market 48 Sector 84 |
Return on Capital % | 8.06 | Market 51 Sector 88 |
Return on Equity % | -28.3 | Market 2 Sector 56 |
Return on Common Equity % | -25.45 | Market 2 Sector 57 |
Total Asset Turnover | 0.4 | Market 38 Sector 55 |
