Teva Pharmaceutical upgraded at Piper Sandler

Analysts at Piper Sandler raised their rating on Teva Pharmaceutical (TEVA) to Overweight from Neutral. They also boosted the price target to $19 from $12. The firm lists several reasons for the upgrade, including an improved outlook on the company's capital structure and the strength of its neuroscience business.

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Editor's note: This article was written by Stephanie Mikulich.

Video Transcript

RACHELLE AKUFFO: Also taking a look at Teva shares also getting a boost in the pre-market, as Piper Sandler upgrades the stock from neutral to overweight. And raises their price target from $12 to $19. Now, the analyst behind the call citing growing contribution from the brand portfolios as one of the reasons behind the call.

I did think it was interesting because we have seen a lot of these pharma stocks really have this question about, what do you do next post-COVID? What is going to be the real driver here? And they talk about confidence in the pharmaceutical company, in their pharmaceutical company brand, and also the potential for further multiple recovery and expansion.

So seeing some potential here, but it does seem to be a very stock-by-stock story, when it comes to how some of these health stocks and pharma stocks are performing.

BRAD SMITH: Yeah, absolutely. And I'm just taking a look at shares of Teva, as-- there we go. Over the past year, still holding on to solid gains of about 22%. I think for the pharmaceutical industry at large, there has been more of this acquisitive mindset.

M&A has been hot as of right now within this pharma landscape, as they're trying to make sure that some of the intellectual property that rolls off that you're setting up for that next leg of growth. And that's where we're seeing some of the M&A really be prompted and come forward, as well as just any focus around what our new landmark treatments and drugs. Landmark treatments during the course of the pandemic looked like anything that was on the messenger RNA platform. Now, it's like OK, but does it GLP-1?

So there's just so many different ways to focus on what that next breakthrough in science will look like, and how that gets passed through to some of the biopharma companies, who are getting their leg of investment in early on ahead of time.

RACHELLE AKUFFO: It's true. And also worth noting because the Biden administration has been cracking down on some of these very expensive medicines, looking at the biosimilars, Teva seems to be better positioned in biosimilars and generics than some of its competitors. So perhaps a little bit more of a competitive edge there for them as well.