雅虎香港財經 Did Teva Pharmaceutical Industries Limited (TEVA)’s “Pivot to Growth” Strategy Help It Get a Positive Rating from Analysts?
We recently compiled a list of the 10 Best Robinhood Stocks Under $20. In this article, we are going to take a look at where Teva Pharmaceutical Industries Limited (NYSE:TEVA) stands against the other Robinhood stocks.
The market reacted favorably after the Federal Reserve’s June 11-12 meeting. The broader market marked record closes. At the June 12 press conference, Fed Chairman Jerome Powell emphasized the Fed's focus on its dual mandate of achieving maximum employment and stable prices. While the labor market remains strong with continued job gains and low unemployment, inflation has decreased significantly from its peak but remains above the 2% target, currently at 2.7% and the Federal Open Market Committee (FOMC) believes it's still high.
Key Developments
The Fed Chairman reported that GDP growth slowed from 3.4% in Q4 of 2023 to 1.3% in Q1 of 2024. However, underlying demand indicated by private domestic final purchases grew at 2.8%. Consumer spending has moderated but remains solid, and investment in equipment and intangibles has improved. Moreover, the labor market is balanced, with job gains averaging 218,000 per month in April and May, and the unemployment rate was at 4%. Inflation, as measured by PCE prices, rose 2.7% over the past year, while core PCE rose 2.8% and the CPI rose 3.3% in May, with the core CPI at 3.4%. Finally, the FOMC decided to keep the federal funds rate unchanged at 5.25% to 5.5% and to continue reducing securities holdings to manage inflation.
Powell emphasized a cautious approach to policy adjustments. The Chairman said that while some progress has been made toward the inflation target, more data is needed to ensure inflation is sustainably moving toward 2%. The Fed will continue to assess economic data and adjust policies as needed to support their dual mandate. He reiterated the commitment to restoring price stability to ensure long-term economic health. The Fed chair noted that the median projection for the federal funds rate by FOMC participants is 5.1% by the end of 2024 if the “economy evolves as expected.” Nevertheless, Jerome Powell highlighted that the projections are not a guarantee and will depend upon the data in the coming months.
The CME’s FedWatch tool reveals that 35.8% of the market expects the interest rates to remain the same in September, 59.2% expect a 25 basis points (bps) reduction, and 5% believe in a 50 bps rate cut. These numbers have risen significantly in favor of rate cuts since we reported them on May 31 in our article about the best up-and-coming stocks.
After a long wait, the Fed has finally hinted at potential rate cuts in September, which brings tons of opportunities in the market. Let's take a look at some now.
Our Methodology
For this article, we used the app to identify over 100 stocks with a $2 billion market cap that were trading under $20, as of June 12. We narrowed down our list to the stocks with positive hedge fund sentiment, analyst ratings, and optimistic prospects and chose the 10 stocks with the highest number of institutional investors.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A close-up shot of various types of medicines on a table, illustrating the specialty and generic products offered by the pharmaceutical company.
Teva Pharmaceutical Industries Limited (NYSE:TEVA)
Number of Hedge Fund Holders: 58
Share Price as of June 12: $17.22
Teva Pharmaceutical Industries Limited (NYSE:TEVA) is engaged in developing, manufacturing, marketing, and distributing generic medicines, specialty medicines, and biopharmaceutical products. The company’s portfolio has 3,600 medicines and more than 53 manufacturing facilities in over 33 countries.
In May 2023, Teva Pharmaceutical Industries Limited (NYSE:TEVA) launched its “Pivot to Growth” strategy which is showing signs of success in the company. On the Street, TEVA sports a consensus Moderate Buy recommendation and high price forecast of $22 represents a 28% upside to the current levels.
At its latest earnings call, Teva Pharmaceutical Industries Limited’s (NYSE:TEVA) management highlighted some of its innovation and pipeline advancements. The company's long-acting Olanzapine for schizophrenia has met all primary and secondary endpoints, with significant potential due to the unmet need for long-acting treatments in this space. Additionally, the management said that the company’s anti-IL15 program targeting celiac disease is showing promise, with a potential market of 2 million patients in the U.S. alone. The early recruitment success and the rapid progression of these programs highlight Teva Pharmaceutical Industries Limited’s (NYSE:TEVA) ability to accelerate clinical development and bring new treatments to market efficiently.
Teva Pharmaceutical Industries Limited’s (NYSE:TEVA) entrance into the $33 billion biosimilars market also makes a bullish case for it. According to Mordor Intelligence, the biosimilars market is expected to be worth $35.47 billion in 2024 and grow to $82.27 billion by 2029 at a compound annual growth rate of 18.32%. On February 24, the company along with Alvotech (NASDAQ:ALVO) announced that the U.S. Food and Drug Administration (FDA) has approved their SIMLANDI (adalimumab-ryvk) injection as an interchangeable biosimilar to AbbVie Inc.’s (NYSE:ABBV) Humira, which was one the world's top-grossing pharmaceutical products in 2023. SIMLANDI is authorized for the treatment of several conditions, including adult rheumatoid arthritis, juvenile idiopathic arthritis, adult psoriatic arthritis, adult ankylosing spondylitis, Crohn’s disease, adult ulcerative colitis, adult plaque psoriasis, adult hidradenitis suppurativa, and adult uveitis. On April 16, the FDA approved another one of the company’s biosimilars, SELARSDI (ustekinumab-aekn), which is used for the treatment of moderate to severe plaque psoriasis and for active psoriatic arthritis in adults and pediatric patients 6 years and older. It is a biosimilar to Janssen Biotech, Inc.’s STELARA.
Teva Pharmaceutical Industries Limited (NYSE:TEVA) was part of 58 funds’ portfolios and the total stake value was $2.04 billion in the first quarter. As of Q1, Slate Path Capital is the top shareholder in the company and has a position worth $379.505 million.
Sound Shore Management made the following comment about Teva Pharmaceutical Industries Limited (NYSE:TEVA) in its Q3 2023 investor letter:
“Away from power, drug maker Teva Pharmaceutical Industries Limited (NYSE:TEVA), a new holding, also performed well during the quarter. Teva develops, manufactures and markets generic and specialty drugs focused on neurological and respiratory diseases, as well as oncology. Following a period of poor capital allocation decisions in prior years, we were able to invest at a very attractive valuation. We now believe management has positioned the company for renewed growth, driven by its most promising branded drug pipeline in years. The investment is off to a good start and the stock gained after second-quarter results topped consensus.”
Overall TEVA ranks 2nd on our list of the best Robinhood stocks to buy. You can visit 10 Best Robinhood Stocks Under $20 to see the other Robinhood stocks that are on hedge funds’ radar. While we acknowledge the potential of TEVA as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TEVA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Read Next: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and Jim Cramer is Recommending These 10 Stocks in June.
Disclosure: None. This article is originally published at Insider Monkey.
