Are Higher Highs Ahead for Teva Pharmaceutical Industries?

Teva Pharmaceutical Industries Ltd (ADR) (TEVA) calls are popular as the stock hits new highs

Apr 9, 2015 at 1:20 PM
facebook X logo linkedin


Drugmaker Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) is once again assailing record heights, peaking at $68.75 earlier today. The stock was last seen 0.8% higher at $67.03, and options traders -- and analysts -- are anticipating even higher highs in the near term.

Roughly 38,000 TEVA calls have already traded today -- four times the average intraday volume, and more than six times the number of puts exchanged. The May series is most popular, with buy-to-open action spotted at the 67.50- and 70-strike calls.

The May 67.50 calls traded at a volume-weighted average price (VWAP) of $3.42, meaning buyers will profit if TEVA topples $70.92 (strike plus VWAP) -- in uncharted territory -- by the close on Friday, May 15, when back-month options expire. Meanwhile, the VWAP of the May 70 calls is $1.84, making breakeven for the buyers $71.84.

With earnings at the end of the month, TEVA's short-term option premiums are relatively inflated at the moment. The equity's 30-day at-the-money implied volatility has jumped 18% to 37.8% -- an annual high -- compared to the stock's 30-day historical volatility of 24.1%. Meanwhile, the equity's Schaeffer's Volatility Scorecard (SVS) sits at a low 7, indicating that TEVA has tended to make undersized moves over the past year, relative to what the options market has priced in.

As alluded to earlier, analysts are fond of Teva Pharmaceutical Industries Ltd (NYSE:TEVA). Just this morning, Barclays upped its price target by $5 to $80 -- representing a record high -- and Cowen and Company bolstered its target by $30 to $100. Both firms underscored the equivalent of an "outperform" rating. Additional price-target hikes could come down the pike, too, as the consensus of $66.17 stands at a discount to TEVA's current perch.

Daily Chart of TEVA since December 2014
 

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