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Teva's New CEO Is A Positive Catalyst

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Teva's New CEO Is A Positive Catalyst
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Shares of Teva Pharmaceutical Industries Ltd (ADR) (NYSE: TEVA) were trading higher by more than 11 percent early Monday morning after the company named Kare Schultz as its new CEO after a seven-month search period.

Schultz brings decades of experience in the pharmaceutical industry and most recently served as the president and CEO of Denmark-based H. Lundbeck A/S. The executive will move to Teva's headquarters in Israel, and his appointment is a positive catalyst that will create a floor for the stock, BTIG's Timothy Chiang commented in a research report.

Chiang upgraded Teva's stock rating from Neutral to Buy with a new $25 price target despite various challenges ahead for the generic drug maker, including a heavy debt-load. But Schultz does bring decades of relevant experience which is the "single most important item."

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Looking forward, Teva's most important pipeline asset, fremanezumab, could prove to be a blockbuster product due to its more flexible dosing regimen. This, along with other generic products in the pipeline, is expected to "attract more attention" heading into 2018 and could provide a boost for the stock.

Bottom line, Teva's stock appears to be oversold, the analyst continued. The stock is trading at a PE multiple of just 4x as opposed to the group average of 9x. The stock is also trading at an EV/EBITDA multiple of 6.7x which is also a discount to the group average of 9.8x.

At time of publication in Monday's pre-market session, shares of Teva were up 12.26 percent at $17.40.

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Latest Ratings for TEVA

DateFirmActionFromTo
Nov 2018Morgan StanleyUpgradesEqual-WeightOverweight
Nov 2018Bank of AmericaMaintainsUnderperformUnderperform
Oct 2018Goldman SachsMaintainsBuyBuy

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