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

Zacks Equity Research
Commercial Metals (CMC) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

Teva Pharmaceutical Industries Ltd. (TEVA) closed the most recent trading day at $16.64, moving +0.79% from the previous trading session. This change outpaced the S&P 500's 0.37% gain on the day. Elsewhere, the Dow gained 0.25%, while the tech-heavy Nasdaq added 0.34%.

Prior to today's trading, shares of the company had lost 4.46% over the past month. This has lagged the Medical sector's gain of 1.34% and the S&P 500's gain of 1.83% in that time.

Wall Street will be looking for positivity from TEVA as it approaches its next earnings report date. In that report, analysts expect TEVA to post earnings of $0.59 per share. This would mark a year-over-year decline of 37.23%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.44 billion, down 12.37% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.40 per share and revenue of $17.34 billion, which would represent changes of -17.81% and -8.05%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for TEVA. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 12.09% lower within the past month. TEVA is currently a Zacks Rank #5 (Strong Sell).

Investors should also note TEVA's current valuation metrics, including its Forward P/E ratio of 6.88. Its industry sports an average Forward P/E of 8.06, so we one might conclude that TEVA is trading at a discount comparatively.

Meanwhile, TEVA's PEG ratio is currently 3.02. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. TEVA's industry had an average PEG ratio of 1.16 as of yesterday's close.

The Medical - Generic Drugs industry is part of the Medical sector. This group has a Zacks Industry Rank of 144, putting it in the bottom 44% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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