Is It Too Late To Reassess Teva Pharmaceutical Industries (TEVA) After Its 75% One Year Rally?

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• If you are wondering whether Teva Pharmaceutical Industries still represents good value after a strong run, or if you may be late to the story, this article focuses on what is currently reflected in the share price.

• The stock closed at US$28.57, with a 1 year return of 75.0% and a 3 year return of 241.7%, even though the last 7 days and 30 days show declines of 8.0% and 15.9% respectively.

• Recent attention on Teva has centred on its role in the generic and specialty drug space and ongoing interest around its position in the US pharmaceutical market. This has kept it on many investors’ watchlists. Broader coverage has also focused on how investors are reassessing large generic manufacturers in light of changing healthcare and pricing pressures, which helps frame these recent share price moves.

• On our valuation checks, Teva scores 3 out of 6 on perceived undervaluation, as shown by our valuation score. Next we will look at how approaches such as DCFs and multiples compare, before finishing with a way to put all these valuation methods into a clearer big picture.

Teva Pharmaceutical Industries delivered 75.0% returns over the last year. See how this stacks up to the rest of the Pharmaceuticals industry.

A Discounted Cash Flow, or DCF, model estimates what a company could be worth by projecting its future cash flows and discounting them back to today in $ terms. For Teva Pharmaceutical Industries, this is done using a 2 Stage Free Cash Flow to Equity approach.

Teva’s latest twelve month free cash flow is reported at about $1.12b. Analysts provide explicit free cash flow estimates for several years ahead, with projections such as $2.50b in 2026 and $3.22b in 2027. Beyond these analyst inputs, Simply Wall St extrapolates additional years, reaching an implied free cash flow of $4.75b by 2035.

When all these projected cash flows are discounted back to today, the model arrives at an estimated intrinsic value of about $59.02 per share. Compared with the recent share price of $28.57, this suggests the stock is trading at a 51.6% discount to this DCF estimate.

Result: UNDERVALUED (per this DCF model)

Our Discounted Cash Flow (DCF) analysis suggests Teva Pharmaceutical Industries is undervalued by 51.6%. Track this in your watchlist or portfolio, or discover 48 more high quality undervalued stocks.

TEVA Discounted Cash Flow as at Mar 2026

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Teva Pharmaceutical Industries.

The P/E ratio is a common way to look at profitable companies because it links what you are paying directly to the earnings they are generating. In general, higher growth expectations and lower perceived risk can justify a higher P/E, while lower growth or higher risk usually line up with a lower, more cautious multiple.

Teva Pharmaceutical Industries is trading on a P/E of about 23.6x. That sits above the Pharmaceuticals industry average of 17.4x and also above the selected peer average of 20.1x, which suggests the market is currently assigning a higher multiple than many sector peers.

Simply Wall St also calculates a proprietary “Fair Ratio” of 23.5x for Teva, which is the P/E level it might trade on given factors such as its earnings profile, industry, profit margins, market cap and company specific risks. This Fair Ratio can be more useful than simple peer or industry comparisons because it adjusts for these company specific characteristics instead of assuming one size fits all. With Teva’s current P/E of 23.6x sitting very close to the Fair Ratio of 23.5x, the market price looks broadly in line with this multiple based assessment.

Result: ABOUT RIGHT

NYSE:TEVA P/E Ratio as at Mar 2026

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Earlier we mentioned that there is an even better way to think about valuation, so let us introduce you to Narratives, which are simply your story about a company linked directly to a forecast for revenue, earnings and margins, and then to a Fair Value that you can compare with today’s price.

On Simply Wall St’s Community page, millions of investors can set up these Narratives quickly by combining their view of Teva Pharmaceutical Industries, such as how its generic and branded portfolio or pipeline could play out, with their own numbers so that the story and the valuation always sit side by side.

Because Narratives are refreshed when new information like news, guidance or earnings is added, you can see your Fair Value move with the data rather than relying on a static model or a single snapshot.

For example, one Teva Pharmaceutical Industries Narrative on the platform currently anchors on a Fair Value of about US$38.05. A more cautious Narrative sits closer to US$21.53. Seeing that spread helps you decide where your own view fits on that spectrum and whether the current share price lines up with it or not.

For Teva Pharmaceutical Industries however we will make it really easy for you with previews of two leading Teva Pharmaceutical Industries Narratives:

🐂 Teva Pharmaceutical Industries Bull Case

Fair value in this bull case narrative: US$38.05 per share

Implied discount to this fair value versus the last close of US$28.57: about 24.9%

Assumed long term revenue growth used in this narrative: 1.23%

• Analysts in this camp focus on Teva’s diversified mix of branded medicines, biosimilars and generics, with particular attention on AUSTEDO, AJOVY, UZEDY and later stage assets like olanzapine LAI and duvakitug supporting higher margin growth.

• They highlight targeted cost savings of about US$700m, modernization efforts and a resilient generics platform, which together are expected to support better margins, higher free cash flow and ongoing debt reduction.

• This view leans on a consensus price target that ties back to specific assumptions for 2028 revenue, earnings of about US$1.5b and a future P/E in the mid 20s, with investors encouraged to test whether those inputs line up with their own expectations for Teva’s pipeline and risk profile.

🐻 Teva Pharmaceutical Industries Bear Case

Fair value in this bear case narrative: US$21.53 per share

Implied premium to this fair value versus the last close of US$28.57: about 32.7%

Assumed long term revenue growth used in this narrative: 1.01%

• The more cautious view centers on Teva’s reliance on a relatively narrow set of growth drivers, such as AUSTEDO, UZEDY and AJOVY, in areas where competition, reimbursement pressure and future launches from peers could limit pricing power.

• It also points to execution and regulatory risk around a concentrated late stage pipeline, potential pricing and margin pressure in biosimilars and generics, and uncertainty around cost savings programs and supply chain changes.

• On these assumptions, bearish analysts arrive at a fair value closer to US$21.53, tied to lower revenue growth and a future P/E a little above the sector average, and suggest that current market expectations may already be baking in a lot of the improvement in earnings and margins.

If you want to see how these narratives look in full, including the detailed earnings paths, assumptions and valuation work behind them, Curious how numbers become stories that shape markets? Explore Community Narratives.

Do you think there’s more to the story for Teva Pharmaceutical Industries? Head over to our Community to see what others are saying!

NYSE:TEVA 1-Year Stock Price Chart

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.

Companies discussed in this article include TEVA.

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