Teva (NYSE:TEVA) Valuation: Assessing Upside After Positive Earnings and Updated Long-Term Growth Targets

Teva Pharmaceutical Industries (NYSE:TEVA) released third quarter results showing a swing to positive net income, a clear shift from last year’s losses. In addition, the company shared updated sales forecasts and long-term revenue goals through 2027.

See our latest analysis for Teva Pharmaceutical Industries.

After months of building momentum, Teva’s impressive turn to profitability and clear long-term revenue ambitions have energized investors. The stock has surged, delivering a 21.1% share price return over the past month and a robust 39.7% total shareholder return in the last year. This reinforces its status as a recovering heavyweight with fresh upside potential.

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But with shares rallying and Teva outlining ambitious targets for the next several years, investors now face a key question: Is the stock still undervalued, or is the market already pricing in the company’s future growth story?

Most Popular Narrative: 11.6% Undervalued

Teva’s widely followed fair value estimate stands above the latest closing price, suggesting notable upside potential even after a strong rally. Market optimism is fueled by several structural growth catalysts and operational initiatives that underpin this valuation.

The accelerating launch cadence of biosimilars (with 8 launches targeted through 2027 and a goal to double biosimilar revenue), supported by favorable regulatory trends increasing biosimilar adoption in major markets, is expected to unlock incremental, higher-margin revenue streams and offset headwinds from traditional generics, supporting long-term EBITDA growth.

Read the complete narrative.

Curious which future launches and breakthrough products actually drive Teva’s premium fair value? The real story is found in growth targets, pipeline potential, and ambitious margin expansion projections. Only the full narrative reveals the numbers and logic behind this bullish valuation case.

Result: Fair Value of $27.45 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing government-mandated drug pricing changes and Teva’s heavy reliance on a handful of branded drugs could upend the bullish outlook if challenges intensify.

Find out about the key risks to this Teva Pharmaceutical Industries narrative.

Another View: What Do Earnings Multiples Say?

Despite the strong fair value estimate, Teva trades on a price-to-earnings ratio of 39x, making it pricier than both the US Pharmaceuticals industry average of 18.1x and its peer group at 33.3x. Even considering our calculated fair ratio of 29.3x, Teva appears overvalued by this yardstick. Could the optimism around growth be overstated?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Teva Pharmaceutical Industries Narrative

If you have a different perspective or want to dive into the numbers yourself, you can build your own story in just a few minutes. Do it your way

A great starting point for your Teva Pharmaceutical Industries research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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