This Pharma Stock's Luck May Be Changing, Says Analyst

Bernstein is breaking out of an overwhelmingly bearish brokerage bunch

Deputy Editor
Mar 25, 2022 at 9:49 AM
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Teva Pharmaceutical Industries Ltd (NYSE:TEVA) stock was last seen up 4.7% at $8.55 this morning, following an upgrade from Bernstein. The analyst upgraded the pharma name to "outperform" from "market perform," citing several recently positive news updates including its product launches and improved balance sheet. Bernstein added that Teva has the potential to settle the opioid litigation the company has been facing. 

Bernstein is a breakout from the overwhelmingly bearish brokerage bunch. All 11 analysts in coverage called the stock a "hold" or worse heading into today.

It's hard to blame these analysts. TEVA has been chopping lower for over a year now, with overhead pressure emerging at nearly all short- and long-term trendlines, including the 200-day, and more recently, the  50-day moving average. The security could topple the latter, however, and has managed an 18% rise off its March 14, two-year low of $7.24. The stock now sports a slim 2% year-to-date lead, though it's off 27% in the last 12 months. 

Options traders have also taken a bearish stance, with short-term players being especially put-biased. This is per TEVA's Schaeffer's Volatility Index (SVI) of 0.96, which stands higher than 99% of annual readings. 

Now may be the time to speculate on the stock's next move with options. TEVA's Schaeffer's Volatility Index (SVI) of 35% sits in the low 15th percentile of its 12-month range. In other words, options traders are pricing in relatively low volatility expectations at the moment. 

 




 
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