Stable, positive trends for Teva, recently upgraded by Morgan Stanley

Pharmaceutical company Teva seems to have set the right course. A few days ago, the group reported a positive Q3 2018. Trends showed that the enormous debt caused by Actavis’ takeover decreased to less than $30bn – moreover yesterday, before U.S. stock exchange opening times, investment bank Morgan Stanley upgraded the company’s rating.

Morgan Stanley’s analysts expect the group’s results to further improve in the near future, also exceeding market expectations. Teva’s major growth drivers are set to be Ajovy (migraine) and Austedo (dyskinesia). They could soon make up for the losses of turnover caused by competition of Copaxone’s generic drugs, which are expected to generate $2.3bn in 2018. Importantly, Teva’s severe austerity policy attained a total cost reduction equivalent to 17% in Q3 (from $3bn to $2.5bn). Furthermore, the company’s cash flow continues to increase, already going from $550m in Q2 2018 to $700m. Said trend, alongside this new duteous management policy, could help decrease the debt to only $22bn in just a few months.

 

Teva’s shares (Nasdaq) rose about 30% YTD.