Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Why Teva Pharmaceutical Industries Ltd. Rallied Today

By Brian D. Pacampara, CFA - Mar 14, 2014 at 4:26PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Does this analyst make a good case? Or is it just more noise from Wall Street?

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 ( TEVA -0.85% ) 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. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Teva Pharmaceutical Industries Limited Stock Quote
Teva Pharmaceutical Industries Limited
TEVA
$8.18 (-0.85%) $0.07

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
656%
 
S&P 500 Returns
144%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/01/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.