Trading Ideas: Picture of Health
Teva Pharmaceuticals (TEVA) is an Israeli generic drug company. Teva’s principal products include Copaxone for multiple sclerosis; and Azilect for Parkinson’s disease.
The stock has been holding in there these days as it is in the middle of its relatively narrow range for the year. It seems investors are perceiving it as a “safer” play in the midst of turbulence. Don’t think that there isn’t any growth here though.
Last week, the company posted data on its Parkinson’s drug Azilect which showed that it helped slow the disease. The drug met the study’s goals in three separate areas. Merrill Lynch upgraded the stock on the news and put a $54 price target on it.
We are impressed with the stock’s fundamental picture. It is trading at a reasonable PEG ratio of 1.0 on next year’s earnings. Estimates have been ticking up as well, rising a penny to $2.70 per share for this year over the past 60 days. TEVA has also beaten estimates in each of the past four quarters by an average margin of 5.1%. We see the stock around $52 within 6-to-12 months.
Suggested Stop: $42.82
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