Teva Pharmaceutical Beats Estimates, Provides Solid Guidance

Nov. 2.11 | About: Teva Pharmaceutical (TEVA)

Teva Pharmaceutical Industries (NASDAQ:TEVA) reported earnings before the bell on Wednesday. The latest earnings report showed good progress on a variety of fronts.

Key data points from the just released earnings report

  • Earnings of $1.25 per share beat consensus of $1.22
  • Teva’s CEO expects a strong Q4, driven by an improving U.S. generics business.
  • Copaxone surpassed $1B in sales for the first time, posting 26% growth in sales.
  • It will have an exclusive launch of generic Zyprexa in the fourth quarter.

5 reasons TEVA is a strong buy at $39 a share:

  1. TEVA is selling at the bottom of its five-year valuation range based on P/E, P/S, P/B, P/CF.
  2. In addition to the exclusive launch of the Zyprexa generic version, Teva should have Bio-T-Gel approved by the FDA in the fourth quarter.
  3. TEVA is trying to put in a technical base just under $38 over the last three months (see chart - click to enlarge)
  4. TEVA has an A- rated balance sheet, is selling at 8 times cash flow, has a projected five-year PEG of less than .9 and a forward PE of less than 7. It also yields almost 2%.
  5. The stock is still selling under analysts’ price targets. The median analysts’ price target on Teva Pharmaceuticals is $58 and S&P has a price target of $54 on TEVA.

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Disclosure: I am long TEVA.