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Teva Pharmaceutical Industries Limited Message Board

  • investora2z investora2z Nov 1, 2013 6:42 AM Flag

    At lower end of the range

    The stock has corrected significantly from the highs made just before the earnings. Resignation of the CEO had a huge negative impact. The sell-off was accompanied by huge volumes, and the recent gains have been totally eroded. It is back a the lower end of the range. The revenues came in at $5.059 billion, slightly better than estimates, while the EPS was 84 cents. The full Year 2013 net revenues are expected to be between $19.7 and $20.3 Billion, and the Non-GAAP diluted EPS is expected to be between $4.95 -5.05. This indicates that the topline is expected to remain flat, while the margins will decline as expected. Some analysts have expressed confidence in the long term prospects of Teva. One analyst expects the margins to improve on the back of the spending cuts. The savings are expected to reach $1 billion a year by the end of 2014 and $2 billion by the end of 2017. This will improve the EPS over the next few years. The author forecasts that the stock could command a share price of around $50 in 2015 and $60 in 2017. The returns appear to be good if one considers the dividend yield. However, there is uncertainty related to its main drug Copaxone. The declines could severely dent the top-line and 2014 could be a tough year. However, the management seems to be confident about the prospects. The stocks owned by Dr. Frost have done extremely well recently, and he works with his other companies to explore synergies. e.g. there is a possibility of Biozone's (BZNE) proprietary drug delivery system QuSomes to help generic drug manufacturers reduce manufacturing costs. For Teva, the sell off is a signal that it may be very difficult for it to cross the higher end of the $36-42 range. The good part is that so far $36 has always provided support.

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    • " The savings are expected to reach $1 billion a year by the end of 2014 and $2 billion by the end of 2017. This will improve the EPS over the next few years. The author forecasts that the stock could command a share price of around $50 in 2015 and $60 in 2017"
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      very close to my calculations as well.. though I see the 50$ towards mid-end of 2014. Will see.

 
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