While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a closer look at particularly stock-shaking upgrades and downgrades -- just in case their reasoning behind the call makes sense.
What: Shares of Teva Pharmaceutical Industries (NYSE: TEVA ) climbed about 2% today after Morgan Stanley upgraded the generic drug giant from underweight to equal weight.
So what: Along with the upgrade, analyst David Risinger planted a price target of $52 on the stock, representing about 8% worth of upside to yesterday's close. So while contrarians might be a bit turned off by the stock's strength in recent months, Risinger's call suggests growing sentiment on Wall Street that Teva's favorable Copaxone trends give it a bit more room to run.
Now what: According to Morgan, Teva's risk/reward trade-off is steadily improving. "Launch of the new 3TW (3 times per week) formulation of Copaxone succeeds in partially diminishing the threat from once daily generics in May '14. Physicians and patients appear to be embracing the new 3TW formulation, and conversion to date has exceeded our expectations," said Risinger. "We now expect Teva to reach its conversion goals (35% by June 1 and 57% by the end of the year). New CEO Eroz Vigodman is a proven turnaround expert, and we expect him to pursue new external growth opportunities." When you couple that bullish outlook with Teva's still-reasonable forward P/E of 11, it's tough to disagree with Morgan's upgrade.
More reliable ways to build wealth
One of the dirty secrets that few finance professionals will openly admit is the fact that dividend stocks as a group handily outperform their non-dividend paying brethren. The reasons for this are too numerous to list here, but you can rest assured that it's true. However, knowing this is only half the battle. The other half is identifying which dividend stocks in particular are the best. With this in mind, our top analysts put together a free list of nine high-yielding stocks that should be in every income investor's portfolio. To learn the identity of these stocks instantly and for free, all you have to do is click here now.