![\"\"](\"https:\/\/www.pgmcapital.com\/wp-content\/uploads\/2019\/06\/Screen-Shot-2019-06-01-at-1.55.29-PM-1024x493.png\")
<\/figure>\n\n\n\nWhat investors want to know, regardless the downgrade of Bank of America – Merrill Lynch, does TEVA still have a brilliant future?<\/p>\n\n\n\n
ABOUT TEVA PHARMACEUTICAL:<\/h3>\n\n\n\n
Teva Pharmaceutical Industries Ltd.,<\/strong> is an Israeli multinational pharmaceutical company, which develops, manufactures, markets, and distributes generic medicines and a portfolio of specialty medicines worldwide. <\/p>\n\n\n\n It operates through two segments, Generic Medicines and Specialty Medicines. <\/p>\n\n\n\n It is the largest generic drug manufacturer in the world and one of the 15 largest pharmaceutical companies worldwide.<\/p>\n\n\n\n Teva Pharmaceutical Industries Limited was founded in 1901 and is headquartered in Petach Tikva, Israel.<\/p>\n\n\n\n Shares of the company trade on both the New York Stock Exchange (via ADR, with symbol TEVA) and the Tel Aviv Stock Exchange. <\/p>\n\n\n\n The company is a member of the Pharmaceutical Research and Manufacturers of America.<\/p>\n\n\n\n The market evidently took notice of the drastic change of mind at Bank of America – Merrill Lynch, as the bank’s most recent price target for Teva had been among the highest out there: $24. So, a cut to $9 was quite drastic.<\/p>\n\n\n\n Shares of Teva have fallen 36.7% so far this year and a price target of US$ 9.00, will bring to company’s share price in its range of mid year 2000 as can be seen in below chart.<\/p>\n\n\n\n The basis, for the analyst to downgrade TEVA, is the fact that they predict a Free-Cash-Flow<\/a> (FCF) for TEVA for 2021 to be 3.5 Billion US$. <\/p>\n\n\n\n Below chart shows Teva Pharmaceutical Industries annual free cash flow history<\/a> and growth rate from 2006 to 2018.<\/p>\n\n\n\n The projected FCF for the TEVA as predicted by BOFA-ML, for 2021, just 2 years from now, is 3.5 Billion US$. It is higher than that of 2018, but also approx. 35% of the company’s market-cap of the company at the close of the market on Friday, May 31, 2019, of 9.45 Billion US$.<\/p>\n\n\n\n So, how can a stock that, just two years from now, will make 35% of its market cap in FCF be downgraded?<\/p>\n\n\n\n The analist expressed concern about the ongoing lawsuits against the company. Teva is facing a mammoth opioid-related suit in an Ohio federal court, along with a lawsuit filed in early May alleging Teva and several other drugmakers conspired to artificially inflate prices and reduce competition. <\/p>\n\n\n\n Over the weekend, the company announced it had agreed to pay US$85 million to the state of Oklahoma to settle claims over its alleged role in the opioid crisis.<\/p>\n\n\n\n The complex nature of the lawsuits makes it difficult, if not impossible, to quantify potential damages or costs related to settlements.<\/p>\n\n\n\n We believe that with US$3 of FCF\/share just two years from now and a sustainable debt situation Teva would inevitably trade much higher than the paltry US$10-11 implied by his current price target.<\/p>\n\n\n\n So, we could actually read his rating as a “near-term underperform, long-term outperform”. <\/p>\n\n\n\n We believe that below, quote from Warren Buffett, might be applicable for Teva Pharmaceutical at the current price.<\/p>\n\n\n\n Based also on the fact that the company is world biggest generic drug company, we believe that the current stock price is a good entry point.<\/p>\n\n\n\n We own shares Teva Pharmaceutical in our personal portfolio.<\/p>\n\n\n\n Last but not least, before taking any investment decision, always take your investment horizon and risk tolerance into consideration. Keep in mind that share prices do not move in a straight line. Past Performance Is Not Indicative Of Future Results.<\/p>\n\n\n\n Yours sincerely,<\/p>\n\n\n\n Eric Panneflek<\/p>\n","protected":false},"excerpt":{"rendered":" Dear PGM Capital\u2019s Blog reader, On Thursday, May 30, Bank of America – Merrill Lynch downgraded Teva Pharmaceutical (NYSE: TEVA) to underperform from Buy, and putting a price target on the stock to US$9 from US$19, causing yet another sell-off. Based on this downgrade, the stock price of company lost approx. 21% of its value[…]<\/a><\/p>\n","protected":false},"author":2,"featured_media":18728,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[51],"tags":[],"class_list":["post-18713","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-pgm-capital-blog"],"_links":{"self":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/18713","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/comments?post=18713"}],"version-history":[{"count":21,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/18713\/revisions"}],"predecessor-version":[{"id":18741,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/18713\/revisions\/18741"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/media\/18728"}],"wp:attachment":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/media?parent=18713"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/categories?post=18713"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/tags?post=18713"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/www.pgmcapital.com\/wp-content\/uploads\/2019\/06\/1920px-TevaPharm.svg_-1024x359.png\")
<\/figure><\/div>\n\n\n\nPGM CAPITAL\u2019s ANALYSIS & COMMENTS:<\/h3>\n\n\n\n
![\"\"](\"https:\/\/www.pgmcapital.com\/wp-content\/uploads\/2019\/06\/Screen-Shot-2019-06-01-at-2.01.24-PM-1024x482.png\")
<\/figure><\/div>\n\n\n\n![\"\"](\"https:\/\/www.pgmcapital.com\/wp-content\/uploads\/2019\/06\/Screen-Shot-2019-06-01-at-7.17.27-PM.png\")
<\/figure><\/div>\n\n\n\nOutlook:<\/h4>\n\n\n\n
![\"\"](\"https:\/\/www.pgmcapital.com\/wp-content\/uploads\/2019\/06\/buffet.jpg\")
<\/figure><\/div>\n\n\n\nDisclosure:<\/h4>\n\n\n\n
![\"\"](\"https:\/\/www.pgmcapital.com\/wp-content\/uploads\/2015\/06\/eric.jpg\")
<\/a><\/figure>\n\n\n\n