On Thursday, BofA Securities adjusted its outlook on Teva Pharmaceutical Industries Ltd. (NYSE:TEVA) shares, increasing the price target to $18 from the previous $16, while maintaining a Buy rating on the stock.
The revision follows the announcement of positive results from the Phase 3 SOLARIS trial for the company's Olanzapine long-aacting injectable (LAI), as well as a strong first-quarter update.
The SOLARIS trial confirmed that TEV-749, Teva's once-monthly LAI version of olanzapine, is not only effective but also appears to be clinically differentiated in a large treatment market.
This development is significant as it adds a potential peak sales contributor of $400 million to Teva's LAI portfolio, according to the analyst from BofA Securities.
In addition to the trial results, Teva's first-quarter performance was highlighted as solid, with the top-line performance of all key segments modestly outperforming expectations.
The analyst noted that the first-quarter results bolster confidence that Teva is on track to deliver results near the top end of its 2024 guidance.
Looking ahead, the analyst pointed to the second half of 2024 for the Phase 2 TL1a update, which will be a pivotal moment in determining the drug's future.
Additionally, the planned divestiture of Teva's TAPI unit in the first half of 2025 is anticipated to address concerns related to terminal value and leverage that currently impact the company's stock multiple.
The BofA Securities analyst reiterated a Buy rating on Teva, citing the company's potential to return to a low growth multiple. The price objective is set at $18 per share based on an 8.25 times projected 2025 EBITDA.
InvestingPro Insights
Following the positive sentiment from BofA Securities, InvestingPro data further highlights Teva Pharmaceutical Industries Ltd.'s (NYSE:TEVA) market position and recent performance. With a market capitalization of $17.7 billion and a significant return over the last year of 72.97%, Teva's stock has been gaining momentum. The company's recent price surge has brought it near its 52-week high, trading at 97.52% of this threshold, reflecting investor confidence and market recognition of its growth potential.
InvestingPro Tips suggest that Teva is a prominent player in the Pharmaceuticals industry, which aligns with the BofA Securities analyst's view of its potential. Notably, analysts predict the company will be profitable this year, supporting the optimistic outlook for the stock. Moreover, the company's strong return over the last month of 12.67% and the last three months of 31.06% indicates robust short-term performance, which may interest investors looking for momentum plays.
For those seeking more comprehensive analysis and additional insights, InvestingPro offers further tips on Teva, including its high shareholder yield and expectations for net income growth. By using the coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription to access these valuable tips and data. There are 14 additional InvestingPro Tips available for Teva, which could further inform investment decisions.
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