Teva Loses Another Bull; Credit Suisse Downgrades

Five analysts have downgraded Teva Pharmaceuticals Industries Ltd (ADR) (NYSE: TEVA) since it reported its second-quarter earnings on Thursday before the market opened.

Credit Suisse’s Vamil Diva is one of them, moving from Outperform to Neutral with a price target dropped from $39 to $25.

The company delivered three devastating pieces of news. It missed the Street’s earnings estimates, cut its fiscal 2017 guidance yet again and slashed its quarterly dividend by 75 percent.

The stock had bottomed to its lowest price since November 2004, a 35 percent drop from Wednesday’s levels.

While a beat was far from expected, UBS analyst Marc Goodman may have said what all Teva investors were thinking: “We didn’t expect the cut to be this bad.”

Goodman reiterated a Neutral rating and $34 price target following the report.

The UBS analyst had expected a new management team to be installed before the company would make those decisions. Teva still doesn't have a full-time CEO or CFO.

The lack of leadership leads Diva to “struggle” to see any potential mid- to long-term upside.

“We had taken a more constructive view on TEVA shares in late 2016 as we felt, while there were some challenges still ahead for the company, the valuation of the stock appeared compelling,” said Diva. “Clearly, we misjudged the scope of these challenges.”

Teva traded recently at $21.77 per share.

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