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

We came across a bullish thesis on Teva Pharmaceutical Industries Limited on Kontra Investments’s Substack by Kontra. In this article, we will summarize the bulls’ thesis on TEVA. Teva Pharmaceutical Industries Limited’s share was trading at $15.71 as of August 5^th. TEVA’s trailing and forward P/E were 872.00 and 6.05, respectively according to Yahoo Finance.

Teva Pharmaceutical Industries has quietly delivered its 10th consecutive quarter of growth, raising 2025 revenue and EPS guidance while reaffirming other targets, underscoring the success of its “Pivot to Growth” strategy. This transformation is driven by three pillars: maximizing innovative products, reigniting R&D, sustaining its generics powerhouse, and streamlining operations. Innovative drugs Austedo, AJOVY, and UZEDY are leading the charge, with Q2 2025 revenues up 19%, 31%, and 120% year-over-year, respectively, and full-year outlooks raised.

Combined, these products are projected to drive revenue from $2.3 billion in 2024 to over $5 billion by 2030. Teva’s late-stage pipeline adds further upside, with olanzapine LAI and duvakitug offering multi-billion-dollar peak sales potential. Financial discipline is another hallmark of the turnaround, with net debt reduced from $34 billion in 2017 to $15.1 billion by Q2 2025 and leverage at 3.09x, on track for 2.0x by 2027. Credit ratings have improved as refinancing extended maturities at favorable costs, enhancing flexibility for reinvestment and future capital returns.

Despite these achievements, Teva trades at a forward P/E of 6.1x versus industry averages of 8–12x, with EPS projected to nearly double by 2028, creating significant rerating potential. While risks remain, including IRA pricing pressure on Austedo and high short interest, management expects continued growth even under discount scenarios. With innovative products gaining traction, a robust pipeline, a strengthened balance sheet, and a valuation that suggests the market has yet to price in its transformation, Teva offers a compelling turnaround story with substantial upside for long-term investors.

Previously, we covered a bullish thesis on Teva Pharmaceutical Industries Limited  by Kontra in May 2025, which highlighted its shift toward innovation, strong growth from Austedo, AJOVY, and UZEDY, and cost reductions under the “Acceleration Phase.” The stock has depreciated about 7% since then due to short-term concerns. The thesis remains valid as deleveraging and pipeline strength persist. Kontra updates their view, including “Pivot to Growth” strategy , product pipeline and re-rating potential.

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Disclosure: None.