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Is Teva Pharmaceutical Industries Ltd. (TEVA) a Great Value Stock Right Now?

Zacks Equity Research

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company to watch right now is Teva Pharmaceutical Industries Ltd. (TEVA). TEVA is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 3.40 right now. For comparison, its industry sports an average P/E of 8.66. TEVA's Forward P/E has been as high as 8.43 and as low as 2.50, with a median of 5.26, all within the past year.

TEVA is also sporting a PEG ratio of 0.80. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. TEVA's PEG compares to its industry's average PEG of 1.76. Within the past year, TEVA's PEG has been as high as 7.15 and as low as 0.59, with a median of 1.86.

Another valuation metric that we should highlight is TEVA's P/B ratio of 0.61. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.15. Over the past year, TEVA's P/B has been as high as 1.58 and as low as 0.44, with a median of 0.92.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Teva Pharmaceutical Industries Ltd. Is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, TEVA feels like a great value stock at the moment.


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