Goldman Sachs Sees 16% Upside in Teva Stock

Following a meeting held last week with the upper management of Teva Pharmaceutical Industries, Goldman Sachs analysts are bullish on Teva, reiterating the "buy" recommendation they first gave in December after the company's reorganization plan was unveiled.

In a report published Monday, the analysts wrote that within a year, Teva went from being "fairly reactionary and directionless" to "a company led by action-oriented leaders with a rapid and clear path to recovery." The analysts were impressed with the progress of the company's deleveraging and cost-cutting measures, stating that Copaxone is proving to be more durable than estimated in the face of generic competition, and that the upside potential for new drugs Austedo and Fremanezumab is promising.

Teva CEO Kåre Schultz. Photo: Yuval Chen

According to Goldman Sachs analysts Jami Rubin, Candace Richardson, Divya Harikesh and Yash Patel, the goal set by Teva CEO Kåre Schultz's of reaching a net debt below four times EBITDA by the end of 2020 is "easily achievable." The analysts raised their 12-month price target for Teva's stock to $28, a 16.7% increase on its current trading price.