Teva Pharmaceuticals is framed as a turnaround story—recovering from past missteps while building a future in branded and specialty drugs. Once heavily reliant on generics, Teva now derives 20% of revenue from branded medications like AUSTEDO, AJOVY, and UZEDY, supported by a robust pipeline of biosimilars and specialty drugs. Despite years of legal overhangs, a disastrous Actavis acquisition, and a 30% drop in global prescriptions, the company has stabilized its cash flows and methodically reduced debt from $34B to $24.5B. Key legal settlements are now largely resolved, credit ratings have been upgraded, and newer branded products are growing rapidly.
By 2027, management projects $2.8B in free cash flow, 30% operating margins, and low-single-digit revenue growth—setting the stage for FCF multiple expansion. With an enterprise value of $34.6B and a market cap of $20B, Teva trades around 10x current FCF. Valuation scenarios suggest 25–30% upside under status quo and over 70% if 2027 targets are achieved. Upcoming catalysts include a $1B+ divestment of its API business, $500M milestone payments from Sanofi, and additional drug launches. Beyond 2027, a 2.0x debt/EBITDA target opens the door to buybacks, dividends, or M&A—turning a once-distressed name into a growth and cash return story.
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