Teva Pharmaceutical Industries Ltd Stock Hold Recommendation Reiterated (TEVA)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Teva Pharmaceutical Industries (NYSE: TEVA) has been reiterated by TheStreet Ratings as a hold with a ratings score of C+. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself.

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Highlights from the ratings report include:
  • Net operating cash flow has increased to $1,102.00 million or 45.76% when compared to the same quarter last year. In addition, TEVA PHARMACEUTICALS has also vastly surpassed the industry average cash flow growth rate of -11.84%.
  • The current debt-to-equity ratio, 0.56, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that TEVA's debt-to-equity ratio is low, the quick ratio, which is currently 0.55, displays a potential problem in covering short-term cash needs.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Pharmaceuticals industry. The net income has significantly decreased by 26.6% when compared to the same quarter one year ago, falling from $859.00 million to $630.00 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Pharmaceuticals industry and the overall market, TEVA PHARMACEUTICALS's return on equity is significantly below that of the industry average and is below that of the S&P 500.

Teva Pharmaceutical Industries Limited develops, manufactures, markets, and distributes pharmaceutical products worldwide. Teva has a market cap of $33.1 billion and is part of the health care sector and drugs industry. The company has a P/E ratio of 17.00, below the S&P 500 P/E ratio of 18.00. Shares are up 2.3% year to date as of the close of trading on Friday.

You can view the full Teva Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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