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Teva Pharmaceutical (TEVA) PT Cut To $52 By UBS Securities, 'Buy' Maintained

 May 25, 2012 03:49 PM

(By Balaseshan) UBS Securities analyst Marc Goodman lowered his price target on shares of Teva Pharmaceutical Industries Ltd. (NASDAQ:TEVA) to $52 from $60, while maintaining his "Buy" rating.

The company's new Chief Executive Jeremy Levin provided an update on the biz. Levin lowered guidance in the European Union by $1 billion with $600 million from foreign exchange and $400 million from macro issues.

Levin lowered U.S. revenues by $540 million which includes $400 million in generics. This $400 million is due to management being more selective on the products it sells with more focus on profitability.

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The $400 million impact will only affect the bottom line by $0.04. The U.S. generics top line impact is composed of a reduction in inventory of $250 million and $150 million of products that will be delayed.

Management had previously assumed 4%-6% growth in European generics but now is assuming no growth for the rest of 2012.

In Europe, management expects a continual decline of inventory levels throughout 2Q with stabilization in 3Q for an overall 2012 impact of $180 million to $190 million. Management is still planning an analyst day later this year to detail its strategy and the pipeline.

Moving big ships takes time, and honestly after listening to the conference call today and hearing about the problems in both the U.S. and Europe, Goodman has even more questions. But as he works through those questions, the stock does trade at less than 7 times his new 2013 EPS estimate and is just too interesting not to be involved at all.

[Related -Teva Pharmaceutical (TEVA) Dividend Stock Analysis]

The brokerage reduced its 2012 EPS estimate to $5.40 from $5.62 and its 2013 estimate to $5.80 from $6.06.

TEVA is trading down 0.21% at $38.61 on Friday.

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