Teva Pharma Industries Ltd ADR (NYSE:) is the world’s largest generic drug maker, with over 500 generic and biosimilar treatments in its broad portfolio. The medical sector giant also has a line of branded drugs driving growth.
Its specialty medicines address specific conditions, including respiratory diseases, oncology, and central nervous system (CNS) disorders. Its stock took a 17% tumble in the days following its of 2024 earnings release. Teva’s cautious full-year 2025 guidance fell short of consensus analyst estimates. With shares trading at just 6.8x forward earnings, value investors may view this as a dip buying opportunity.
The Transformative Year 2024
Teva Pharmaceuticals, like many other large drug makers and pharmacies like Johnson & Johnson (NYSE:), Allergan (NYSE:), CVS Health (NYSE:), and Walgreens Boots Alliance (NASDAQ:), were involved in settlements for their participation in the opioid epidemic. Teva’s black cloud surrounding the opioid settlements dissipated after 2023 when the company agreed to make ongoing payments and supply their generic version of Narcan as part of the agreement. This marks 2024 as the year of normalization and return to growth.
Teva CEO Richard Francis commented:
“2024 marked a transformative year for Teva, resulting in a second consecutive year of growth, driven by our generic products and key innovative products. Focusing on the rigorous execution of our Pivot to Growth strategy throughout the year, we continued to achieve important milestones in each of its four pillars, including surpassing the outlook for our key innovative products, growing our generics business across all segments, and accelerating our early-stage innovative pipeline, including the positive Phase 2b results for our duvakitug (anti-Tl1A) asset. These results pave the way for pivotal trials in Crohn’s disease and ulcerative colitis, as well as, potentially, other Immunological and fibrotic indications beyond, in collaboration with our partner, Sanofi (NASDAQ:).”
Wrapping Up 2024 With a Strong Finish for a Solid Year
Teva’s Q4 2024 results were relatively strong. The company posted EPS of 71 cents, which met consensus estimates.
Revenues fell 5.1% year-over-year (YoY) to $4.23 billion, beating $4.23 billion consensus estimates.
For the full year 2024, revenues rose 6% YoY to $16.5 billion. Its generics business grew 15% in the United States, 6% in Europe, and 15% YoY in international markets. Global sales of its brand drugs were robust.
AUSTEDO exceeded $1.6 billion in revenues, surpassing the company’s 2024 outlook.
AJOY revenues rose 17% YoY to $507 million. UZEDY revenues surpassed the $100 million outlook, generating $117 million in 2024.
Guidance Was on the Cautious Side
Teva issued its 2025 full-year preliminary guidance for EPS of $2.35 to $2.65 versus $2.78 consensus estimates. Full-year revenue is expected to be between $16.8 billion to $17.4 billion versus $17.09 billion consensus estimates. This is what triggered the sell-off in shares.
First-to-Market Generic GLP-1 Medication in 2025
In January 2025, Teva entered into a license and supply agreement for a proposed GLP-1 treatment in the United States and Europe. The company with be first-to-market with the launch of a generic version of Sandostatin LAR Depot and liraglutide injection 1.8mg. It’s an authorized generic of Victoza.
Liraglutide is a GLP-1 agonist, which is the active ingredient in Victoza. Victoza is an older GLP-1 drug made by Novo Nordisk (NYSE:), maker of semaglutide, the active ingredient in Ozempic and Wegovy. Victoza was an early GLP-1 used specifically for type 2 diabetes, with patients losing an average of 6.2 pounds. It paved the way for the development of the newer GLP-1 drugs Ozempic and then Wegovy for weight loss.
TEVA Stock Forms a Symmetrical Triangle Breakdown
A symmetrical triangle is comprised of a descending (falling) upper trendline resistance converging with an ascending (rising) lower trendline support at the apex point. A breakout occurs when the stock surges above the upper trendline resistance. A breakdown occurs when the stock collapses below the lower trendline support. A breakout or breakdown becomes eminent as the stock gets closer to the apex point as the channel narrows.
TEVA formed a symmetrical triangle with the upper descending trendline forming at the $22.80 swing high and the ascending lower trendline support forming at the $19.03 gap fill. TEVA chopped towards the apex point before gapping down on its earnings release to the $19.75 level and proceeding lower towards the $17.26 fib. Fibonacci (Fib) pullback support levels are at $17.26, $16.83, $16.25 and $15.81.
TEVA stock’s average consensus price target is 23.56% higher at $22.00, and its highest analyst price target sits at $30.00. It has six analysts’ Buy ratings and two Hold Ratings. The stock has a 1.39% short interest.
Bullish investors can consider using cash-secured puts at the Fib pullback support levels to buy the dip. If assigned the shares, then writing covered calls at upside Fib levels executes a wheel strategy for income.
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