Argus: Teva Worth $75

• Teva Pharmaceutical Industries Ltd (ADR) TEVA shares have declined 16.09 percent over the past six months, ending Wednesday's session at $57.70.
• Argus’ Jacob Kilstein has maintained a Buy rating on the company, while lowering the price target from $82 to $75.
• Kilstein believes that the impending acquisition of generics from Allergan plc Ordinary Shares AGN would boost operating efficiencies and sales for Teva Pharma, while improving its margins.

Analyst Jacob Kilstein explained, “As patents expire for branded drugs, Teva has been able to take market share with low-cost generic alternatives.”

In addition, the company’s Specialty business, with Copaxone for multiple sclerosis as its key product, has been performing well and has a robust pipeline of new products.

For 4Q15, Teva Pharma reported its non-GAAP EPS below the consensus, with higher than consensus revenue. Sales in both the Specialty and Generics segments declined during the quarter.

For 2015, revenue was ahead of the consensus, although the EPS missed the consensus expectations.

Management has not provided any guidance for 2016, since the company is still waiting to complete the Allergan acquisition.

“However, it projected first-quarter adjusted EPS of $1.16-$1.20, below the consensus forecast of $1.26, and revenue of $4.7-$4.9 billion, below the consensus of $5.2 billion,” Kilstein said.

The 2016 EPS estimate has been raised from $5.66 to $5.68.