Teva Pharmaceutical Industries (NYSE:TEVA): Evaluating Valuation After European Approval for Key Biosimilars

Teva Pharmaceutical Industries (NYSE:TEVA) has received European Commission approval for its biosimilars PONLIMSI and DEGEVMA. This development strengthens its position in the biosimilars space and aligns with its ongoing Pivot to Growth strategy.

See our latest analysis for Teva Pharmaceutical Industries.

It has been a big year for Teva. Recent launches like the new open innovation platform, Teva Rise, and regulatory approvals in Europe have driven fresh attention and confidence among investors, fueling a 34% 1-month share price return and lifting the 1-year total shareholder return to an impressive 59%. The company’s momentum is building, reflecting both renewed growth prospects and changing risk perceptions as it pivots successfully into biosimilars and innovation.

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With the stock up nearly 60% over the past year and positive news driving momentum, is Teva still trading below its true value, or are investors already anticipating higher future growth in the share price?

Most Popular Narrative: 5.7% Undervalued

With Teva shares closing at $26.32, the most closely followed narrative places fair value at $27.90. This sets expectations for modest upside if the company delivers on its core growth thesis.

Operational efficiencies, modernization, and a resilient generics platform are strengthening Teva's financial foundation, supporting income growth, free cash flow, and debt reduction. Heavy dependency on select branded drugs, ongoing debt constraints, and heightened regulatory and competitive risks threaten sustainable growth and margin improvement.

Read the complete narrative.

What keeps analysts betting on Teva’s future? One bold assumption about sustainable profit margins and premium multiples is baked in. Want a peek at which ambitious forecasts are shaping these valuation models? The details behind this high-conviction price target may surprise you. Dive deeper to see what could spark the next rally.

Result: Fair Value of $27.90 (UNDERVALUED)

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

However, persistent reliance on key branded drugs and ongoing debt pressures could quickly shift Teva’s growth outlook if margins or cash flow do not meet expectations.

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

Another View: Market Ratios Point to Overvaluation

Looking at the company’s price-to-earnings ratio, Teva trades at 42.4x, which is well above both the US Pharmaceuticals industry average of 20.5x and the peer average of 35.1x. This also exceeds its fair ratio of 29.6x, suggesting the market might be pricing in a lot of optimism. Does this premium highlight investor confidence, or could it signal a risk if earnings growth falls short?

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

Build Your Own Teva Pharmaceutical Industries Narrative

If you have your own take or want to dig deeper into Teva’s story, why not test the data for yourself and shape your own perspective in 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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