NEW YORK, June 7 /PRNewswire/ -- Teva Pharmaceutical Industries (TEVA: $53) has been picked by Standard & Poor's Equity Research as its Focus Stock of the Week. TEVA carries S&P's highest investment recommendation of 5-STARS, or Strong Buy.
"As the premier player in the global generic pharmaceutical industry, Teva is uniquely positioned to capitalize on the significant growth that is forecast for this market over the coming years," said Herman Saftlas, Equity Pharmaceuticals Analyst at Standard & Poor's Equity Research. "Key growth drivers for this market include a wealth of new generic product opportunities resulting from an unprecedented period of patent expirations on branded blockbuster drugs and potential volume gains stemming from efforts by government and private third-party payers to encourage greater usage of inexpensive generics to constrain rising health care costs."
Saftlas believes that Teva has the broadest generic product line and most extensive generic pipeline in the U.S., as well as leading positions in many other generic markets around the world. Other positives for Teva, according to Saftlas, include the company's low-cost manufacturing position, and a broad array of production technologies and economies of scale. He also sees significant potential for Teva's branded, patented pharmaceutical business, whose flagship product is Copaxone, a treatment for multiple sclerosis.
In recent weeks, Teva's shares have come under selling pressure, which Saftlas attributes to pricing pressures in Europe, weakness in the euro, concerns over Protonix litigation, and FDA-cited problems at the company's Irvine, CA plant. "We believe all of these issues are manageable, and we expect Teva to deliver on its ambitious short and long-term performance goals," said Saftlas. "We view TEVA's valuation as compelling, with the ADSs recently trading at about 12 times our 2010 operating EPS estimate of $4.55, below current peer multiples, and near the low end of its historical price/earnings range."
To view a video of Mr. Saftlas discussing TEVA, paste the following link in to your browser. http://link.delvenetworks.com/media/?mediaId=5f47afdff858465f815a766f8b7103ca&width=480&height=411&playerForm=DelvePlayer
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S&P Global STARS Distribution
In North America
As of March 31, 2010, research analysts at Standard & Poor's Equity Research Services North America recommended 35.9% of issuers with buy recommendations, 52.8% with hold recommendations and 11.3% with sell recommendations.
As of March 31, 2010, research analysts at Standard & Poor's Equity Research Services Europe recommended 37.9% of issuers with buy recommendations, 39.3% with hold recommendations and 22.8% with sell recommendations.
As of March 31, 2010 research analysts at Standard & Poor's Equity Research Services Asia recommended 42.9% of issuers with buy recommendations, 49.1% with hold recommendations and 8.0% with sell recommendations.
As of March 31, 2010, research analysts at Standard & Poor's Equity Research Services globally recommended 36.9% of issuers with buy recommendations, 50.1% with hold recommendations and 13.0% with sell recommendations.
5-STARS (Strong Buy): Total return is expected to outperform the total return of a relevant benchmark, by a wide margin over the coming 12 months, with shares rising in price on an absolute basis.
4-STARS (Buy): Total return is expected to outperform the total return of a relevant benchmark over the coming 12 months, with shares rising in price on an absolute basis.
3-STARS (Hold): Total return is expected to closely approximate the total return of a relevant benchmark over the coming 12 months, with shares generally rising in price on an absolute basis.
2-STARS (Sell): Total return is expected to underperform the total return of a relevant benchmark over the coming 12 months, and the share price is not anticipated to show a gain.
1-STARS (Strong Sell): Total return is expected to underperform the total return of a relevant benchmark by a wide margin over the coming 12 months, with shares falling in price on an absolute basis.
Relevant benchmarks: In North America, the relevant benchmark is the S&P 500 Index, in Europe and in Asia, the relevant benchmarks are generally the S&P Europe 350 Index and the S&P Asia 50 Index.
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SOURCE Standard & Poor's