12/28/2012 7:08:21 AM
Teva Pharmaceutical Industries Ltd. (TEVA), the world’s largest maker of generic drugs, will rebound from the lowest valuations among peers in 2013 as concern about revenue growth eases, Gabelli & Co. said. American depositary receipts of Teva fell 1.3 percent to $36.95 yesterday in New York, extending their slump this year to 8.5 percent. The ADRs are poised for a third annual decline, the longest rout on record. The Bloomberg Israel-US Equity Index (ISRA25BN) of the largest New-York traded Israeli companies dropped for a fifth day with Cellcom Israel Ltd. (CEL) leading the retreat. Teva, based in Petach Tikva, Israel, has lost 13 percent since Chief Executive Officer Jeremy Levin failed to alleviate investors’ concerns about the company’s outlook as he unveiled on Dec. 11 a plan to replace revenue from branded drugs set to lose patent protection in the next three years. The plunge sent valuations to 6.9 times estimated earnings, the lowest multiple among the world’s 20 biggest drug companies, which have an average price-earnings ratio of 13.6. “From a valuation standpoint, Teva is certainly very attractive,” Kevin Kedra, an analyst at Gabelli who has a buy rating on the shares, said by phone yesterday from Rye, New York. “Levin has been able to reset the bar lower, so meeting or exceeding those hurdles in the first two quarters would help build his credibility and bring back investors.” Teva’s shares in Israel dropped 1.6 percent yesterday to 138.5 shekels, or the equivalent of $37.15 as Tel Aviv’s TA-25 Index (TA-25) slipped 0.2 percent to 1,184.12. The Bloomberg Israel-US Equity Index fell 0.6 percent 85, a five-week low.