Analyst still bullish on record-level Teva

The stock touched NIS 169.30 on the Tel Aviv Stock Exchange and $36.74 on the Nasdaq Thursday, its highest levels ever.

By SUSAN LERNER
October 20, 2005 21:32
2 minute read.
teva logo 88

teva 88. (photo credit: )

 
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News of a legal settlement earlier this week has boosted the share price of Teva Pharmaceutical Industries to all-time highs but the generic drug giant remains an attractive investment. "There appear to be two very nice years of growth ahead," said David M. Steinberg, research analyst at Deutsche Bank. The stock touched NIS 169.30 on the Tel Aviv Stock Exchange and $36.74 on the Nasdaq Thursday, its highest levels ever. Although Steinberg believes Teva's settlement with Wyeth, which will allow Teva to sell a generic version of Wyeth's Effexor XR antidepressant, likely won't impact earnings this quarter, he said there could be a positive influence in another few years. Also underpinning Steinberg's positive outlook for the company is the expected launch of an impressive number of new generic products that he expects will carry Teva into 2007, as well as synergies with Ivax Corp. that could become more apparent in 2007 than 2006. Teva's planned acquisition of Miami, Florida-based Ivax is expected to close by year-end. Steinberg said Teva "has a very good track record of integrating its acquisitions," so synergies from the deal could be better than expected. Nevertheless, Steinberg, who carries a "buy" recommendation on the shares, was reluctant to boost his $36 price target until he gets a better sense of next year's revenue stream. Currently, he believes the stock fully reflects all available information. "What we're really waiting for is to see what they have to say in their quarterly update as to their generic business in general and the pending Ivax acquisition," Steinberg said. "Hopefully, there will be better granularity as to what's ahead."

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