Teva Pharmaceutical Industries Limited (TEVA): A Bull Case Theory

We came across a bullish thesis on Teva Pharmaceutical Industries Limited on Kontra Investments’ Substack by Kontra. In this article, we will summarize the bull’s thesis on TEVA. Teva Pharmaceutical Industries Limited’s share was trading at $17.09 as of June 24^th. TEVA’s trailing and forward P/E ratios were 872.00 and 6.53, respectively, according to Yahoo Finance.

Teva Pharmaceuticals is undergoing a strategic transformation known as its “Pivot to Growth,” reaffirmed at its May 29th Strategy and Innovation Day. Historically dominant in generics, Teva is repositioning itself as a more balanced company with a growing focus on innovative drugs, targeting over $5 billion in revenue from this segment by 2030.

Key innovation areas include neuroscience, immunology, and respiratory treatments, supported by Teva’s robust leadership team with experience from top pharmaceutical firms. Teva’s generics business continues to provide stability, while operational efficiency initiatives are underway to streamline manufacturing and cut costs. The company’s innovative pipeline is particularly promising, with its Long-Acting Injectable (LAI) schizophrenia treatments like UZEDY and TEV-’749 showing strong real-world outcomes and peak sales potential of $1.5–$2 billion.

AUSTEDO, used for Tardive Dyskinesia, may exceed $3 billion in annual sales despite IRA-related concerns. Other high-potential assets include Duvakitug for IBD (in partnership with Sanofi), emrusolmin for Multiple System Atrophy, and DARI, a novel asthma inhaler—all of which present multi-billion-dollar peak sales opportunities. Despite a market cap of around $20 billion, Teva trades at a discount to peers due to lingering legacy concerns.

However, improved debt metrics—with net debt/EBITDA trending toward 2.0x by 2027—and strong free cash flow projections of $3.5 billion by 2030 indicate financial health and growth. Gross margin expansion, driven by the shift to branded drugs, further enhances the story. For investors willing to tolerate near-term uncertainty, Teva presents a compelling case for long-term upside and re-rating as its strategic shift matures.

Previously, we covered a bullish thesis on Teva Pharmaceutical Industries Limited (TEVA) by Kontra in April 2025, which highlighted the company’s cost discipline, branded drug growth, and undervaluation. The company’s stock price has appreciated by approximately 22.6% since our coverage. This is because the thesis played out. Kontra shares a similar view but emphasizes Teva’s “Pivot to Growth” strategy.

Teva Pharmaceutical Industries Limited is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 64 hedge fund portfolios held TEVA at the end of the first quarter, which was 72 in the previous quarter. While we acknowledge the risk and potential of TEVA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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