Wall Street Thinks Teva Stock Still Has Room to Run After Soaring Over 100%. Here's Why Analysts Are Right.
Key Points
Teva's stock has more than doubled over the last year, but analysts remain bullish.
Sales continue to soar for Teva's branded drugs, while its balance sheet is improving.
Teva still faces some challenges, but this is no longer a company in crisis.
Once upon a time, Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) was a stock that many investors didn't want to touch with a 10-foot pole. The pharmaceutical company faced legal challenges over its opioid drugs. Its debt load was staggering. Sentiment was overwhelmingly negative.
But there's a much different story for Teva these days. The pharma stock has soared more than 100% over the last 12 months. Wall Street thinks that Teva has even more room to run. Are analysts right to be bullish? I think so.
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Why Wall Street thinks Teva still has upside
Of the 13 analysts surveyed by S&P Global (NYSE: SPGI) in May, 12 rated Teva as a "buy" or "strong buy." The lone outlier recommending holding the stock. The consensus 12-month price target reflects a potential upside of around 11%.
Why is Wall Street still bullish about Teva after its impressive gains? For one thing, the company's branded portfolio is firing on all cylinders. Huntington's chorea and tardive dyskinesia drug Austedo is leading the way, with first-quarter sales jumping 41% year over year to $578 million.
Teva has also paid down much of its debt. Its financial leverage stood at 67% as of March 31, 2026, a significant improvement from the past. The company is cutting costs, too. Teva expects to realize around $470 million of net savings this year from its transformation initiatives.
Analysts recognize the promise of Teva's pipeline. The U.S. Food and Drug Administration (FDA) is set to make a decision later this year on approval of olanzapine extended-release injectable suspension (TEV-'749) for the treatment of schizophrenia in adults. Evercore ISI's (NYSE: EVR) Umer Raffat thinks the potential FDA approval of olanzapine is Teva's "most meaningful catalyst."
Furthermore, Teva's valuation still looks attractive even after its tremendous performance over the last 12 months. The stock trades at only 13 times forward earnings, well below the average forward earnings multiple of 16.5 for the healthcare sector. You could argue that's value stock territory.
Teva's turnaround is real
There's no question at this point that Teva's turnaround is real. And Wall Street believes the stock has more gas in the tank.
To be sure, Teva still faces challenges. Some litigation uncertainty lingers. The company's generic-drug business continues to face pricing pressure. Pipeline setbacks are a perpetual threat.
However, Teva is no longer a company in crisis. Its revenue and profits are growing. Its balance sheet is stronger. Most stories that begin with "once upon a time" have a happy ending. This one could, too, if analysts are right.
Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Evercore and S&P Global. The Motley Fool has a disclosure policy.