The inventory of Teva Pharmaceutical Industries (SUITS YOU 5.63%) closed the trading week in style, registering a rise of almost 6% on Friday. The generic drug specialist received a revaluation from the recommendation of a reputable financial institution, hence the rise in the share price.
The establishment in question is Bank of America. Analyst Jason Gerberry of the bank’s securities unit raised his recommendation on Teva from neutral to buy. Along the way, he also raised his price target on the stock, to $13 per share from $10 previously. This new level implies nearly 22% upside from the last closing price.
Gerberry’s move is part of a broader reorganization of healthcare industry ratings. It also comes after last month’s announcement that Teva had reached a $4.25 billion interim settlement with a host of parties over its alleged role in the US opioid crisis.
In his latest research note, referring to Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), the analyst wrote that “we believe Teva is making significant progress toward clearing up its outstanding legal litigation which, along with a strong new 2023-24 product cycle should be enough to bring the business back to EBITDA growth.”
Gerberry’s points are well understood, and operating in an environment where the population is aging and will require more medical care (plus the cheap generic drugs Teva specializes in), the company is poised to do well. Investors clearly bought this argument on Friday; the bulls are clearly returning to Teva’s stock.
Bank of America is an advertising partner of The Ascent, a Motley Fool company. Eric Volkman has no position in the stocks mentioned. The Motley Fool has no position in the stocks mentioned. The Motley Fool has a disclosure policy.