-- Teva Pharmaceutical Industries (TEVA) could see further upside as its valuation re-rates, supported by "expanding branded growth" and pipeline strength following its Q1 results, UBS Securities said in a report Thursday.
The firm said confidence in the company's growth profile has improved on a broadening pipeline, including the Emalex Biosciences acquisition, and rising investor "appetite" for de-risked biopharma names, while the company is emerging as a rare mix of "affordable valuation" and branded growth potential, with easing geopolitical concerns after it flagged no "material operational impact."
The firm also highlighted "shareholder-friendly capital allocation," noting that Teva has accelerated its business development strategy and is considering potential share buybacks earlier than "previously guided."
The company's management has signaled openness to additional deals, alongside plans to reduce leverage to below 2x net debt to EBITDA by 2027 and achieve investment-grade status by 2026, according to the report.
UBS has a buy rating on Teva Pharmaceutical and raised its price target to $42 from $36.
Price: $35.15, Change: $-0.23, Percent Change: -0.65%