Teva Pharma stock rating reiterated at Buy by BofA on Austedo growth

Investing.com - BofA Securities has reiterated its Buy rating and $22.00 price target on Teva Pharmaceutical (TADAWUL:2070) Industries (NYSE:TEVA), citing positive growth prospects for its Austedo medication. Currently trading at $16.42, Teva appears undervalued according to InvestingPro analysis, with analysts setting targets ranging from $18.07 to $30.00.

The research firm expects Austedo, which treats tardive dyskinesia, to achieve approximately 10% revenue compound annual growth rate from 2024 to 2029, despite potential impacts from Medicare IRA price negotiation.

BofA’s forecast assumes Austedo will reach a 50-50 market split in the VMAT2 inhibitor category, with survey data indicating meaningful growth potential for the category over the next three years.

Physician feedback from BofA’s movement disorder survey showed no additional payer utilization restrictions, which the firm views as positive for access in what it describes as an under-treated tardive dyskinesia market.

BofA Securities maintains its positive outlook on Teva based on what it considers an "undemanding valuation" and an "attractive new product cycle," while emphasizing that brand growth remains critical to the company’s near-term outlook, particularly if IRA price negotiation results in a 20-25% net price reduction.

In other recent news, Teva Pharmaceutical Industries is preparing to announce its second-quarter earnings, with JPMorgan expecting revenues of $4.3 billion and earnings per share of $0.63. Goldman Sachs has initiated coverage on Teva with a Buy rating and a price target of $24.00, citing strong growth prospects in the branded segment, including products like Austedo and Uzedy. UBS has adjusted its price target for Teva to $23.00 from $24.00, maintaining a Buy rating, and notes the company’s steady execution progress despite slow investor uptake. Truist Securities also began coverage with a Buy rating and a $25.00 price target, highlighting Teva’s robust growth strategy and potential to compete with larger pharmaceutical companies.

Teva has reiterated its financial goals for 2027, aiming for a 30% operating profit margin and a free cash flow exceeding $2.7 billion. The company plans to achieve $700 million in net savings through operational efficiencies, which will be reinvested into research and development. Goldman Sachs analysts project limited growth in Teva’s generics segment but see opportunities in the expanding biosimilars portfolio. UBS mentions that the key focus for Teva will be Austedo IRA negotiations, which are currently driving short interest. As Teva prepares for its investor day, analysts and investors are keenly watching for further insights into the company’s strategic plans and growth prospects.

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