UBS has adjusted its outlook on Teva Pharmaceutical Industries Ltd. (NYSE: NYSE:TEVA), increasing the price target to $26.00 from the previous $24.00 while maintaining a Buy rating on the stock.
The investment firm's decision is buoyed by the potential of Teva's drug candidate duvakitug, which is anticipated to deliver positive Phase 2 data in the fourth quarter.
The analyst from UBS expressed optimism about the drug's market potential, highlighting that duvakitug could be a significant catalyst for Teva's stock, offering substantial upside with minimal downside risk.
The updated price target now stands as the highest on Wall Street. The analyst's confidence stems from an in-depth review of the market dynamics, Teva's competitive positioning, and the molecular differentiation of their partnered pipeline asset with Sanofi (EPA:SASY) (NASDAQ:SNY).
The firm's revised expectations for duvakitug's peak sales now reach $1.5 billion, accounting for Teva's 50% share of the revenue. This projection has led to an increase in the price target. UBS also estimates risk-adjusted sales for the year 2030 to be $640 million, a figure that notably surpasses the consensus estimate of $330 million.
In other recent news, Teva Pharmaceuticals reported a significant rise in its second-quarter revenue for 2024, with a noteworthy increase to $4.2 billion, marking an 11% growth from the previous year.
The growth was bolstered by the firm's generics business and other growth engines. Additionally, the company noted a non-GAAP earnings per share of $0.61, up from $0.56 in Q2 2023, and consequently raised its full-year revenue guidance to between $16 billion and $16.4 billion.
In a separate development, Piper Sandler reiterated its Overweight rating on shares of Teva, maintaining a price target of $23.00. This decision followed the announcement by Evernorth to exclude the brand Humira from its Express Scripts (NASDAQ:ESRX) commercial formularies starting in 2025, which is expected to benefit Teva's Humira biosimilar, Simlandi.
The analyst at Piper Sandler highlighted a favorable outlook for Teva's U.S. generics and biosimilars business in 2025, supported by Teva's planned entry into the biosimilar Stelara market in February 2025.
InvestingPro Insights
As Teva Pharmaceutical Industries Ltd. (NYSE:TEVA) garners attention with its promising drug candidate and UBS's increased price target, InvestingPro data offers additional insights into the company's financial health and market performance. With a market capitalization of $21.12 billion, Teva's significant presence in the pharmaceutical industry is further underscored by its revenue growth. The company has seen an 8.48% increase in revenue over the last twelve months as of Q2 2024, reflecting a robust gross profit margin of 49.5%. These numbers suggest a solid financial foundation, which could support the company's investment in drug development and potential market expansion.
InvestingPro Tips highlight Teva's high shareholder yield and the expectation that net income will grow this year. These factors, coupled with the company's strong return over the last year—showing a 91.77% price total return—paint a picture of a company that is gaining momentum in the market. While analysts have revised earnings downwards for the upcoming period, the overall sentiment is buoyed by the prediction that Teva will be profitable this year. For investors seeking more detailed analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/TEVA, which can provide further guidance on Teva's market prospects.
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