JPMorgan boosts Teva Pharmaceuticals stock rating amid cost-saving plans

On May 12, 2025, in the United States, JPMorgan made a significant move regarding Teva Pharmaceuticals, an Israeli pharmaceutical company, by upgrading its rating from neutral to overweight. This decision was primarily influenced by Teva's recent announcement of a new cost-cutting program designed to generate approximately $700 million in net savings. Analysts, led by Chris Schott, viewed this initiative as critical for the company's financial health and future growth potential. Schott also raised the price target for Teva's U.S.-listed shares by $2 to $23, which indicates an expected upside of about 35.9% based on the prior week's closing level. The analyst expressed that before the announcement, concerns had been raised about Teva's operating margin, particularly regarding the target of achieving a 30% margin by 2027. However, this upcoming cost program was seen as pivotal for bridging the gap between current results and this margin goal. Furthermore, Schott emphasized that beyond the cost-cutting measures, he anticipates significant improvement in Teva's growth trajectory in the coming years. Coupled with the efficiency initiatives, he characterized Teva's product portfolio as well-positioned for growth, highlighting products like the Austedo tablets, which have performed better than expected, as well as the anticipated launch of olanzapine next year, which is projected to become a billion-dollar product. Although the analyst’s upgrade placed Schott in line with the majority of Wall Street’s sentiments for Teva, the market reaction was not as favorable, as shares of Teva fell nearly 5% in premarket trading due to an executive order from President Donald Trump aimed at reducing drug costs. This downturn follows a turbulent year for Teva, which has seen its stock plummet by more than 23% in 2025 after an exceptional rise of over 110% in the previous year, reflecting the fluctuations and challenges within the pharmaceutical sector.