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On Monday, JPMorgan upgraded Teva Pharmaceutical (TADAWUL:2070) Industries Ltd (NYSE:TEVA) stock from Neutral to Overweight and increased the price target from $21.00 to $23.00. According to InvestingPro data, analysts’ targets for Teva range from $18.07 to $30.00, with the company currently showing signs of being undervalued based on Fair Value analysis. The revision follows Teva’s announcement of a $700 million cost-cutting initiative last week, which JPMorgan believes will significantly contribute to the company’s margin expansion goals for 2026 and 2027.
The cost-cutting program is expected to bridge the gap from Teva’s current financial performance to its target of a 30% operating margin by 2027. This strategic move comes as Teva navigates through the challenges of a decrease in revenues from its drug gRevlimid and the need to invest in its product pipeline. With current revenues of $16.62 billion and an EBITDA of $4.45 billion, InvestingPro analysis shows the company maintains a solid financial health score, rated as "GOOD" by their comprehensive evaluation system.
Teva’s growth outlook appears to be improving, particularly with its branded business portfolio. JPMorgan highlighted the continued growth of Austedo, a treatment for chorea associated with Huntington’s disease and tardive dyskinesia, and the anticipated launches of Olanzapine LAI in 2026 and Duvakitug (TL1a), which shows potential in the treatment of Crohn’s Disease and the broader inflammatory bowel disease (IBD) market.
The analyst’s positive stance on Teva is underpinned by the belief that the company’s branded business will drive growth beyond the cost-cutting measures, particularly as new products such as Olanzapine LAI and Duvakitug enter the market in the coming years.
Teva Pharmaceutical Industries Ltd., with its new financial strategy and upcoming product launches, is expected to see improved growth as it works towards achieving its long-term financial targets. InvestingPro Tips highlight that Teva is a prominent player in the Pharmaceuticals industry and analysts predict the company will be profitable this year. Subscribers can access 4 additional exclusive ProTips and a comprehensive Pro Research Report, part of InvestingPro’s coverage of over 1,400 US equities.
In other recent news, Teva Pharmaceutical Industries Ltd. reported its first-quarter earnings, surpassing analyst expectations. The company posted adjusted earnings per share of $0.52, exceeding the consensus estimate of $0.48. However, revenue was slightly below projections, coming in at $3.9 billion compared to the expected $3.98 billion. Key growth drivers included a 39% increase in AUSTEDO revenues to $411 million and a 26% rise in AJOVY sales to $139 million. Teva raised its full-year 2025 earnings guidance to $2.45-$2.65 per share, up from the previous outlook of $2.35-$2.65. The revenue forecast for 2025 was adjusted to $16.8-$17.2 billion, reflecting the divestiture of its Japan business venture. Excluding this impact, Teva indicated an improved underlying full-year outlook. The company remains focused on achieving a 30% operating margin by 2027, with plans for $700 million in net cost savings to support this goal.
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