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Teva Pharmaceutical Industries Ltd. (TEVA) Gains But Lags Market: What You Should Know

Zacks Equity Research

Teva Pharmaceutical Industries Ltd. (TEVA) closed at $12.10 in the latest trading session, marking a +0.33% move from the prior day. This change lagged the S&P 500's 1.13% gain on the day. At the same time, the Dow added 1.68%, and the tech-heavy Nasdaq gained 0.43%.

Coming into today, shares of the company had gained 32.53% in the past month. In that same time, the Medical sector gained 2.11%, while the S&P 500 gained 2.1%.

Investors will be hoping for strength from TEVA as it approaches its next earnings release, which is expected to be February 12, 2020. The company is expected to report EPS of $0.62, up 16.98% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $4.36 billion, down 4.26% from the year-ago period.

Investors should also note any recent changes to analyst estimates for TEVA. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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. The Zacks Consensus EPS estimate has moved 0.29% lower within the past month. TEVA is currently a Zacks Rank #3 (Hold).

Investors should also note TEVA's current valuation metrics, including its Forward P/E ratio of 4.82. This represents a discount compared to its industry's average Forward P/E of 7.43.

We can also see that TEVA currently has a PEG ratio of 1.17. 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. The Medical - Generic Drugs was holding an average PEG ratio of 1.17 at yesterday's closing price.

The Medical - Generic Drugs industry is part of the Medical sector. This industry currently has a Zacks Industry Rank of 162, which puts it in the bottom 37% 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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