Health and Healthcare
Why Credit Suisse's Neutral Rating on Teva Almost Sounds Like a Buy Rating
Published:
Last Updated:
When investors hear that a company is initiated in coverage with a Neutral rating, they generally interpret this to mean Hold. Some might even say that it means Sell. Things are different in the Credit Suisse ratings system because it uses a relative peer-reference base rather than a market performance-based expectation. It turns out that a new Neutral rating on Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) from Credit Suisse actually comes with significant upside.
One thing investors need to consider is that as bull markets continue, analysts issuing Buy or Outperform ratings for large cap stocks generally come with implied upside of 8% to 15%. Teva was given an implied upside north of 13% here, if you include its 2.5% dividend yield.
Credit Suisse’s price target of $60 compares to a prior close of $54.20, but the weakness in the stock market on Wednesday and the unenthusiastic Neutral rating by the sound of it had Teva’s shares down another 1.1% to $53.60. From that level, the implied upside is almost 15%.
So, what is it that Credit Suisse sees happening with Teva for close to 15% upside but only a Neutral rating? Vamil Divan and Anamaria Sudarov made the Neutral recommendation on Wednesday.
24/7 Wall St.Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
