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Teva Pharmaceutical Industries Ltd. (TEVA) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research

Teva Pharmaceutical Industries Ltd. (TEVA) closed the most recent trading day at $7.68, moving -0.13% from the previous trading session. This change lagged the S&P 500's 0.69% gain on the day. At the same time, the Dow added 0.65%, and the tech-heavy Nasdaq gained 0.58%.

Coming into today, shares of the company had lost 6.79% in the past month. In that same time, the Medical sector lost 3.36%, while the S&P 500 gained 1.36%.

TEVA will be looking to display strength as it nears its next earnings release, which is expected to be August 7, 2019. The company is expected to report EPS of $0.58, down 25.64% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $4.27 billion, down 9.24% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.38 per share and revenue of $17.15 billion, which would represent changes of -18.49% and -9.01%, respectively, from the prior year.

Any recent changes to analyst estimates for TEVA should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.13% lower. TEVA is currently a Zacks Rank #3 (Hold).

Investors should also note TEVA's current valuation metrics, including its Forward P/E ratio of 3.24. For comparison, its industry has an average Forward P/E of 7.63, which means TEVA is trading at a discount to the group.

It is also worth noting that TEVA currently has a PEG ratio of 0.76. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. TEVA's industry had an average PEG ratio of 0.85 as of yesterday's close.

The Medical - Generic Drugs industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 68, which puts it in the top 27% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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