Share of Teva Pharmaceutical have not done very well lately, with shares tumbling more than 30% over the past two trading days. TEVA stock is now down 43% since the start of 2017, hitting its lowest levels since 2003.
The trouble began when Teva reported its second-quarter earnings. Although sales grew 13%, earnings plunged and cash flows dried up. As a result, management cut guidance. Then the analysts piled on. Monday isn't getting much better, with Teva stock down 4% one hour into the session.
Analysts at the Bank of Jerusalem downgraded Teva to market perform and assigned a $26 price target -- $6 per share higher than its current price. However, Morgan Stanley downgraded the stock to underweight and assigned a $16 price target. The target implies about $4 per share or 20% more downside from current levels.
That's analyst David Risinger's best-case scenario, who used to have a $36 price target on it. Pricing pressure on generic drugs should continue, weighing on Teva earnings, he reasoned. As a result, Risinger cut his EPS forecast for fiscal 2017, 2018 and 2019.
Risinger's bear case is far more stark, with a price target of just $9. The bear case price target factors in an even worse-than-anticipated decline in Teva's business. Risinger's $9 price target would imply $11 per share of downside, or another 55%. Ouch.
It doesn't help that there have also been concerns about its debt load, too.
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