Bethel Finance news:
UBS reiterated its "Buy" recommendation for Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) and target of $64, following its acquisition of Cephalon Inc. (Nasdaq: CEPH) yesterday. Analyst Marc Goodman was disappointed, saying, "We get it, we were just hoping for something else."
Goodman says that while he is "certainly not negative on the deal", and that it enables to Teva to diversify away from Copaxone and add several late-stage products, the revenue outlook for 2012 is "lumpy". In addition, investors are already nervous because of potential branded and generic competition to Copaxone. He concludes, "We don't expect investors will give Teva any more credit for the pipeline than they did for Cephalon."
Goodman says that Teva's share price rose less than expected following the acquisition, which "likely reflected investors’ skepticism regarding Teva's aggressive move into brands and execution of expected synergies. We understand the concerns but have confidence in management to execute on a branded deal (achieve synergies) and believe Teva’s base business remains underappreciated and the stock undervalued and thus we still like Teva."
UBS predicts that Teva will make a net profit of $4.62 billion ($5.12 per share) on $18.59 billion revenue in 2011, and a net profit of $5.21 billion ($5.75 per share) on $20.89 billion revenue in 2012.
Bank Hapoalim also reiterated its "Outperform" recommendation for Teva with a target price of $60. It says, "Teva made a strategic acquisition... The company's target is $9 billion in branded drug sales in 2015… This acquisition was desirable and necessary to meet its targets."
Teva's share price rose 3.4% on Nasdaq yesterday to $47.27, giving a market cap of $44.4 billion, but fell 0.7% in morning trading on the TASE today to NIS 160.10.
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