Why Teva Pharmaceutical Industries, Gramercy Property Trust, and Medtronic Jumped Today

Find out which of these stocks got a buyout bid.

Dan Caplinger
Dan Caplinger
May 7, 2018 at 4:32PM
Health Care

The stock market posted small advances on Monday, with most major benchmarks picking up between 0.4% and 0.8%. Much of the attention on Wall Street centered on other financial markets, which included favorable price action in oil, a surge in the value of the U.S. dollar against many foreign currencies, and relatively weak performance from gold. Yet there was still plenty of good news that sent individual companies' shares higher. Teva Pharmaceutical Industries (NYSE:TEVA), Gramercy Property Trust (NYSE:GPT), and Medtronic (NYSE:MDT) were among the best performers on the day. Here's why they did so well.

Teva looks healthier

Shares of Teva Pharmaceutical Industries rose 4% after the company reported first-quarter financial results. The drugmaker suffered a 10% drop in revenue due largely to poor conditions in the U.S. generic drug market, and adjusted earnings per share also dropped double-digit percentages from year-ago levels. Yet CEO Kare Schultz said that the company is on track with its restructuring plan, which it believes will cut $1.5 billion in costs this year and $3 billion by the end of 2019. Moreover, Teva boosted its full-year 2018 earnings guidance by $0.15 per share and its free cash flow projections by $400 million, to new ranges of $2.40 to $2.65 per share in earnings and $3 billion to $3.2 billion in free cash flow. Despite ongoing challenges, investors have high hopes that this marks the beginning of a more meaningful turnaround for Teva.

Man wearing white coat and blue gloves loooking at a pill, with dozens of other pills scattered on a glass table.

Image source: Getty Images.

Gramercy gets an offer

Gramercy Property Trust stock soared 15.5% in the wake of the real estate investment trust (REIT) getting a buyout bid from a would-be acquirer. A fund run by institutional investment giant Blackstone Group (NYSE:BX) announced that it would pay $27.50 per share in cash for Gramercy, putting the total value of the company at $7.6 billion. Coming on the heels of another deal in the sector, those following REITs are pleased to see buying interest even in the face of rising interest rates, which would ordinarily depress valuations. If all goes well, Blackstone hopes to close on the Gramercy deal sometime during the second half of the year.

Medtronic makes a hire

Finally, shares of Medtronic gained nearly 5%. The medical device maker said that it had hired JPMorgan equity research managing director Mike Weinstein as a senior vice president for strategy. Medtronic believes that it will benefit from Weinstein's expertise in business development, capital deployment, and creation of shareholder value. The former analyst agreed, saying, "Having covered Medtronic for more than two decades now, I have full confidence in the outlook and the strategy, and our ability to unlock that value in the months and years ahead." The move also has investors excited that Medtronic might look for shareholder-friendlier ways to get the stock moving higher after staying in a holding pattern over the past couple of years.