TEVA Stock Tumbles After $85 Million Opioid Settlement

The stock hit a 19-year low earlier

Digital Content Manager
May 28, 2019 at 10:00 AM
facebook X logo linkedin


Drugmaker Teva Pharmaceutical Industries Inc. (NASDAQ:TEVA) settled a lawsuit filed by the state of Oklahoma, accusing TEVA -- and other pharmaceutical firms -- of fueling the opioid epidemic through marketing of its generic painkillers. Teva agreed to pay an $85 million settlement. The stock is down 1.8% at $10.68, in response, fresh off a new 19-year low of $10.71. 

UBS reacted to the news by downgrading TEVA to "neutral" from "buy," and slicing its target price to $12 from $22. UBS' outlook is nothing new among the brokerage bunch, with a whopping 15 out of 19 analysts calling TEVA a "hold" or worse. The consensus 12-month target price, however, is all the way up at $17.86.

On the charts, TEVA has been trading in a channel of lower highs and lows, recently pressured by its descending 10-day moving average. The stock suffered a bear gap earlier this month after the company was named in a price-fixing lawsuit, and just hit a new one-year low of $10.82 last Friday. Now, the stock is eyeing its fourth day in the red, and its lowest close since 2000.

Short sellers have been cashing out amid this negative price action. Short interest has fallen nearly 15% in the last two reporting periods, now representing just 1.8% of the stock's available float.

Options traders, on the other hand, have been ramping up their bearish exposure to the drug stock. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), TEVA's 10-day put/call volume ratio of 1.11 ranks in the 77th annual percentile, meaning puts have been bought to open over calls at a quicker-than-usual clip.

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI