On Monday, Jefferies updated its outlook on Teva Pharmaceutical Industries Ltd. (NYSE:TEVA), increasing the price target from $16.00 to $17.00 while maintaining a Buy rating on the stock. The firm highlighted the pharmaceutical company's successful execution of its growth strategy and pointed out several elements that are believed to be undervalued by the market.
According to the firm, the recent meetings with Teva's CEO, CFO, CMO, and Investor Relations revealed that the company's branded and generic drug strengths, along with its biosimilar developments and the divestiture of its TAPI unit, are not fully appreciated by investors. The firm also emphasized the potential of Teva's innovation pipeline to further enhance the company's valuation.
Despite a significant year-to-date increase in Teva's stock price, Jefferies considers the stock to be trading at a discount. The firm suggests that the second half of 2024 could bring pivotal pipeline readouts, which might serve as a key catalyst for a more substantial expansion in the company's stock multiple.
The firm's statement underscored the potential impact of the upcoming pipeline developments, "Even with a ~30% move YTD, Teva trades at a discounted valuation, and we believe the 2H24 pipeline readouts could represent the catalyst needed to drive more meaningful multiple expansion."
Investors and stakeholders of Teva Pharmaceutical Industries are likely to keep a close watch on the company's performance and the progression of its pipeline in the coming months, as suggested by the updated price target and continued Buy rating from Jefferies.
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