NEW YORK (TheStreet) -- Shares of Teva Pharmaceutical Industries Ltd. (TEVA) - Get Report were down 1.36% to $71.09 in mid-morning trading Tuesday, after analysts at BMO Capital Markets upgraded shares of the pharmaceutical company this morning.
The firm upgraded Teva to "outperform" from "market perform" with a higher price target of $80 from $75.
The firm thinks the deal makes the company a generic leader, and sees the purchase as "very positive" with significant cost savings.
Israel-based Teva Pharmaceutical Industries is a global pharmaceutical and drug company with generic products covering nearly every major therapeutic area.
The company operates its business under two segments including generic medicines and specialty medicines.
Separately, TheStreet Ratings team rates TEVA PHARMACEUTICALS as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate TEVA PHARMACEUTICALS (TEVA) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations, expanding profit margins, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has significantly increased by 50.77% to $1,354.00 million when compared to the same quarter last year. In addition, TEVA PHARMACEUTICALS has also vastly surpassed the industry average cash flow growth rate of -59.86%.
- The gross profit margin for TEVA PHARMACEUTICALS is rather high; currently it is at 63.49%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, TEVA's net profit margin of 8.95% significantly trails the industry average.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- TEVA PHARMACEUTICALS's earnings per share declined by 40.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, TEVA PHARMACEUTICALS increased its bottom line by earning $3.56 versus $1.50 in the prior year. This year, the market expects an improvement in earnings ($5.23 versus $3.56).
- You can view the full analysis from the report here: TEVA Ratings Report