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Teva Pharmaceutical Industries Limited Message Board

  • investora2z investora2z Jul 4, 2013 1:38 PM Flag

    Growth has to pick up

    The stock has moved in tandem with its fundamental performance over the years. From 2010 onwards, the net income has declined consistently, and so has the stock. The net income has fallen from $3.33 billion in 2010 to $1.96 billion in 2012, and the revenue has increased from $13.9 billion to $20.3 billion during the same period. The stock price has moved from ~$64 in April 2010 to ~$39 now. Even on quarterly basis, the recent earnings have shown declines in revenues and net income. The litigation against Pfizer and the impairment charges have weighed on the stock. The debt is very high at around $12.66 billion and the cash is comparatively low at $1.39 billion. The forward P/E is, however, low at ~7, indicating that there are expectations of good growth in earnings over the next couple of years. This could be related to the fact that the Pfizer case has been settled, and the impairments related to that may have already been provided for. So that hangover would not affect the stock so much now. Revenue growth and margin improvement are a must for improving the analyst outlook towards the stock. It has products in the pipeline and there has been positive news about some of its candidates. The strategy for growth is focused on improving the R&D capabilities in both the generic-drug and specialty drug segments. Innovation is the key to success in the industry and even smaller companies like PLC Systems (PLCSF) are growing based on innovative proprietary technologies. The company has plans to increase focus on emerging markets which are currently not contributing much to the sales. In 2012, US contributed 51% of its revenues while Europe contributed 28% and rest of the world contributed the balance. Unless it gets the growth story moving, the sluggish performance may continue.

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    • Previously, TEVA bought BARGAIN companies. Since, they paid FULL BOAT for biggies, BOUGHT sales, & have writeoffs. SOOOO? Good management now (BIT GREEDY), wide foundation of drugs to spread overheads, & will soon show results & growth.
      Had hiatus under IDF General who knew NOTHING of INDUSTRY, MANAGEMENT but NEEDED A PLACE TO "RETIRE" - the SYSTEM, BOTH IN ISRAEL & USA for military/congressional "EXES" -- PITY & COSTLY.

      Sentiment: Buy

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