Teva retains Perform rating at Oppenheimer after 4Q23 earnings beat

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Teva retains Perform rating at Oppenheimer after 4Q23 earnings beat
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On Monday, Oppenheimer maintained a Perform rating for Teva Pharmaceutical Industries Ltd. (NYSE: NYSE: TEVA ), following the company's fourth-quarter earnings that surpassed expectations. The positive results were partly attributed to a $500 million payment from Sanofi (EPA: SASY ) (NASDAQ: SNY ) for TL1A, which may not have been fully anticipated in market projections.

The firm acknowledged Teva's "Pivot to Growth" strategy, which appears to be in its initial stages but shows promising signs. This includes trends of growth in innovative products and signs of stabilization in the generics sector. These factors contribute to the firm's confidence in Teva's revenue guidance for the full year of 2024, which is expected to be between $15.7 billion and $16.3 billion. This represents a 4% year-over-year increase excluding the Sanofi transaction, with projections centered around $16.0 billion.

Teva has also announced its plans to divest its API (Active Pharmaceutical Ingredients) business. This strategic move is intended to free up capital for increased research and development investment, and it is expected to have a neutral impact on the company's profit margins.

The adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) guidance for Teva remains relatively flat compared to 2023, ranging from $4.5 billion to $5 billion. This guidance reflects an anticipated improvement in gross margins, which is likely to be balanced out by increased selling, general, and administrative expenses. These expenses are intended to maximize the uptake of innovative products and support the launch of high-value and complex generic drugs.

While Teva is potentially preparing for the launch of its Humira biosimilar within the year, Oppenheimer awaits further clarity on this and other late-stage biosimilar opportunities before adjusting their outlook.

InvestingPro Insights

Analyzing the latest financial data from InvestingPro, Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) shows a market capitalization of $13.77 billion and a notable revenue growth of 6.17% in the last twelve months as of Q4 2023. The company's revenue for the same period stands at $15.85 billion, which aligns closely with the full-year revenue guidance highlighted by Oppenheimer. Teva's strategic initiatives, including the divestment of its API business, are reflected in the company's strong return over the last three months, with a 36.6% price total return.

InvestingPro Tips for Teva emphasize the company's status as a prominent player in the Pharmaceuticals industry with a high shareholder yield. Analysts predict that Teva will be profitable this year, which is an important consideration for investors monitoring the company's "Pivot to Growth" strategy and its potential to yield positive financial results. Notably, Teva is trading near its 52-week high, with the price at 97.15% of this peak, signifying investor confidence in the company's recent performance and future prospects.

For investors seeking more in-depth analysis, InvestingPro offers additional tips on Teva, including insights on profitability, dividend policies, and analyst predictions. With the New Year sale, a subscription to InvestingPro is currently available at a discount of up to 50%. Use coupon code SFY24 to get an additional 10% off a 2-year InvestingPro+ subscription, or SFY241 to get an additional 10% off a 1-year InvestingPro+ subscription, and gain access to a wealth of financial data and expert analysis to inform your investment decisions.

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