Teva Pharmaceutical Industries Limited (NYSE:TEVA) Just Reported And Analysts Have Been Lifting Their Price Targets
Investors in Teva Pharmaceutical Industries Limited (NYSE:TEVA) had a good week, as its shares rose 4.6% to close at US$12.46 following the release of its full-year results. Revenues of US$16b beat expectations by a respectable 3.2%, although statutory losses per share increased. Teva Pharmaceutical Industries lost US$0.50, which was 108% more than what the analysts had included in their models. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Teva Pharmaceutical Industries after the latest results.
See our latest analysis for Teva Pharmaceutical Industries
Taking into account the latest results, Teva Pharmaceutical Industries' eleven analysts currently expect revenues in 2024 to be US$15.7b, approximately in line with the last 12 months. Earnings are expected to improve, with Teva Pharmaceutical Industries forecast to report a statutory profit of US$0.30 per share. Before this earnings report, the analysts had been forecasting revenues of US$15.6b and earnings per share (EPS) of US$0.50 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.
Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 8.4% to US$13.25, suggesting the revised estimates are not indicative of a weaker long-term future for the business. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Teva Pharmaceutical Industries, with the most bullish analyst valuing it at US$16.00 and the most bearish at US$10.00 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2024 compared to the historical decline of 3.2% per annum over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 8.8% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Teva Pharmaceutical Industries to suffer worse than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Teva Pharmaceutical Industries going out to 2026, and you can see them free on our platform here.
You can also see whether Teva Pharmaceutical Industries is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
