Teva (NYSE:TEVA) Valuation Check After Strong Q3, Margin Targets and Deleveraging Drive a Sharp Share Price Rebound

Teva Pharmaceutical Industries (NYSE:TEVA) is getting fresh attention after upbeat Q3 results, with revenue up 3% and debt ratios improving as management leans harder into higher margin innovative drugs like AUSTEDO and AJOVY.

See our latest analysis for Teva Pharmaceutical Industries.

The market has clearly noticed, with a roughly 36% 1 month share price return and 46.9% 3 month share price return propelling Teva to $27.83, while its 3 year total shareholder return above 230% signals that momentum is firmly building rather than fading.

If Teva’s turnaround story has your attention, it could be a good moment to scan other pharma names with improving fundamentals and income potential through pharma stocks with solid dividends.

With the shares now hugging Wall Street’s consensus price target and the turnaround clearly in motion, are investors still getting Teva at a discount, or is the market already baking in the next leg of growth?

Most Popular Narrative: 20% Undervalued

Against Teva Pharmaceutical Industries last close at $27.83, the most widely followed narrative points to a higher fair value anchored in improving earnings power.

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

Read the complete narrative.

Curious what kind of revenue runway, margin expansion, and future earnings multiple are baked into that upside view? The narrative leans on bold profitability and valuation assumptions that could reframe how this slow growing top line justifies a much richer share price.

Result: Fair Value of $27.90 (UNDERVALUED)

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

However, this upside view could unravel if IRA pricing on AUSTEDO bites harder than expected or if execution on key biosimilar launches stumbles.

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

Another View: Multiples Flash a Caution Light

While narratives and fair value estimates point to upside, the current price tag looks stretched on earnings. Teva trades on a 44.8x price to earnings ratio, well above the US pharma average of 20x, peers at 35.9x, and even our fair ratio of 28.3x.

This gap suggests investors are already paying up for execution and IRA clarity, leaving less margin for error if growth or margins disappoint, or for upside if things go right. Is the market getting ahead of itself, or just pricing a durable turnaround early?

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

Build Your Own Teva Pharmaceutical Industries Narrative

If you see the story differently or want to dig into the numbers yourself, you can build a personalized narrative 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.