Shares of drugmaker Teva Pharmaceutical  (TEVA - Get Report) surged on Monday, partially recovering from last week's losses, after receiving an upgrade from an analyst at Oppenheimer, albeit with a reduced 12-month price target on the stock.

Teva stock gained more than 5% on Monday after Oppenheimer analyst Esther Rajavelu upgraded the company to outperform from perform - even as she lowered her price target for the shares to $12 from $17.

In a research note to clients, Rajavelu noted that the stock at current levels represents a buying opportunity, given that the company's business fundamentals continue to improve and that management's execution efforts on development and distribution of its generic drug products remains in line with expectations.

However, legal uncertainties surrounding its opioid exposure could remain an overhang on the stock, she noted, estimating that the company's opioid liability exposure is somewhere between $500 million and $700 million.

Shares of Teva plunged last week after UBS downgraded the Israeli pharmaceutical company's stock to neutral from buy and lowered its price target $12 from $22 amid the company's exposure to opioid-related litigation.

Teva recently said it had reached an agreement with Oklahoma that includes an $85 million payment to the state - just days before a trial slated for Tuesday over opioid claims made against the drugmaker by the state's attorney general.

More than 40 other states have filed lawsuits against a variety of drug companies including Teva, seeking compensation for medical, law enforcement and treatment-related costs of the opioid epidemic.

Shares of Teva were up 46 cents at $9.10 in trading on the New York Stock Exchange.