On Friday, Barclays upgraded shares of Teva Pharmaceuticals TEVA from Equalweight to Overweight and raised the price target from $42 to $65.
Analyst Douglas Tsao's upgrade was based on the expectation “shares will experience a re-rating as the company "unlocks" value in its core generics business, deploys capital and,
perhaps most importantly in the near term, manages the decline of the Copaxone
franchise through conversion to the 40mg formulation.”
Tsao takes a contrarian stance to market skepticism and believes Teva will “be able to manage the decline of its Capaxone franchise in line with management's expectations through conversion to the 3x weekly mg formulation.”
The analyst's research suggests “managed care will approach conversion to a potential AB-rated generic cautiously given the molecule's complexity.”
Share of Teva are up 1.8 percent to $49.87 following the upgrade. Tsao's sees an additional 30 percent of upside from current levels.
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