Teva Pharmaceutical Industries Limited TEVA stock has gained 17.2% year to date, driven by better-than-expected operating performance, higher revenue expectations, a growing branded portfolio, a strengthening pipeline, management’s successful implementation of its “Pivot to Growth” strategy and improving credit quality. Investor sentiment has improved as the company’s long-term growth outlook has strengthened. However, Teva still faces several risks and operational challenges.
Let’s take a closer look at Teva’s key strengths and weaknesses to better assess how investors should approach the stock amid its improving fundamentals.
Teva’s New Innovative/Branded Drugs Deliver Strong Growth
Teva’s higher-margin branded and innovative medicines are transforming its portfolio mix and financial profile and emerging as an important growth driver.
Its newer products—Austedo, Ajovy and Uzedy—are gaining market share and delivering strong top-line growth. Collectively, sales of the three drugs rose 43% year over year to more than $1 billion in the second quarter. Teva expects their combined sales to reach approximately $3.7 billion in 2026, representing around 17% growth at the midpoint.
Austedo remains the largest contributor to the franchise, with global sales rising 40% year over year to $696 million in the second quarter. Teva expects Austedo revenues of $2.45-$2.60 billion in 2026, with the midpoint broadly matching its previous target of more than $2.5 billion by 2027. This could put the drug roughly a year ahead of schedule. The Austedo franchise got a boost from the launch of Austedo XR, a new once-daily formulation of Austedo. Teva expects Austedo revenues to exceed $3 billion by 2030.
Ajovy is also delivering strong growth, with global revenues increasing 56% on a constant-currency basis to $244 million in the second quarter. Teva expects Ajovy sales of $850-$870 million in 2026, and estimates peak global sales potential of approximately $1 billion. Meanwhile, Uzedy revenues increased 43% year over year to $77 million in the second quarter, with full-year 2026 sales expected to reach $270-$290 million.
Pipeline Could Further Expand Teva’s Innovative Franchise
The company also has several key branded pipeline assets in neuroscience and immunology, which it believes represent a multi-billion-dollar commercial opportunity. These include olanzapine LAI, a long-acting subcutaneous injectable for schizophrenia, and ecopipam, which was acquired through Emalex Biosciences and is being developed for pediatric Tourette syndrome. Both candidates are under U.S. regulatory review, with Teva targeting potential launches of olanzapine LAI in the fourth quarter of 2026 and ecopipam in the first half of 2027, subject to approval.
Another key pipeline asset is duvakitug, a late-stage anti-TL1A therapy being developed for inflammatory bowel diseases, including ulcerative colitis and Crohn’s disease. Teva has partnered with Sanofi SNY for duvakitug to maximize the value of the asset. Teva and Sanofi will equally share the development costs globally. At the second-quarter conference call, Teva announced plans to begin studies for duvakitug in two additional indications — hidradenitis suppurativa and fibrostenotic Crohn’s Disease. It believes duvakitug has pipeline-in-a-product potential.
Teva plans to make five regulatory submissions for its branded candidates over the next five years: olanzapine in 2026, ecopipam in 2027, followed by Dual Action Rescue Inhaler (a dry powder inhaler for asthma), emrusolmin (multiple system atrophy) and duvakitug between 2028 and 2030.
In 2022, only about 9% of Teva’s revenues came from its branded drugs. Teva now expects it to reach 22% of total revenues in 2026. Teva anticipates generating more than $5 billion in revenues from its branded products by 2030.
Teva’s Generics Franchise Navigates a Challenging 2026
Teva’s generics business faces a revenue cliff for lenalidomide capsules (the generic version of Bristol-Myers’ Revlimid) due to increased competition in the United States. Teva’s global generics revenues decreased 16% in the first quarter and 15% in the second quarter of 2026, mainly due to lower sales of Revlimid generic in the United States. Global generics revenues are expected to be flat to down in low single digits in local currency in 2026, excluding the impact of generic Revlimid and the Japan business divestment, due to fewer high-value launches, lower seasonal demand for OTC products and increased competition in some markets.
Biosimilars Becoming an Attractive Part of Teva’s Generics Story
Teva is gradually shifting from being predominantly a traditional small-molecule generic manufacturer to a more diversified player in complex generics and biosimilars.
Biosimilars are transforming Teva’s generics portfolio. The company currently has 15 biosimilars in its portfolio and 14 in its pipeline. Its biosimilars portfolio includes nine candidates in partnership with Alvotech, including biosimilar versions of J&J’s JNJ Stelara (Selarsdi) and AbbVie’s Humira (Simlandi).
Some recent biosimilar launches, Selarsdi, Simlandi and Epysqli (biosimilar of AstraZeneca’s Soliris), are contributing to growth. In 2026, Teva received approval for Ponlimsi, a biosimilar to Amgen’s Prolia, in the United States and EU and also launched Ahzantive, a biosimilar to Regeneron REGN/Bayer’s Eylea, in the EU. In July 2026, it signed a global licensing agreement with Polpharma Biologics for a proposed biosimilar to Roche’s Ocrevus.
A biosimilar version of Xgeva is under review in the United States and EU. Biosimilar versions of Regeneron’s Eylea, J&J’s Simponi and Takeda’s Entyvio, which are in collaboration with Alvotech, are under review in the United States. A biosimilar of Roche’s Xolair is also under review in the United States and EU. In partnership with mAbxience, Teva is developing oncology biosimilars, TEV-‘316 and TEV-‘333.
Though revenues from its global generics business are declining in 2026 due to lower revenues from the generic Revlimid, Teva is enhancing its biosimilars portfolio. It is on track to launch three additional biosimilars in 2027, building a robust portfolio of 18 biosimilars while expecting to double it in the next few years. Teva expects its biosimilars portfolio to generate $800 million in revenues by 2027.
While 2026 is expected to be softer, Teva’s generics business is poised to deliver 1-2% annual growth over the long term, supported by a steady flow of new product launches.
TEVA’s Price, Valuation & Estimate Discussion
Shares of Teva have rallied 107.7% in the past year compared with the industry’s 55.2% growth.
TEVA Stock Outperforms Industry YTD
Image Source: Zacks Investment Research
The stock is trading at a decent valuation relative to the industry. Going by the price/earnings ratio, the company shares currently trade at 13.42 on a forward 12-month basis, lower than 16.48 for the industry. However, the stock is trading above its five-year mean of 5.45.
TEVA Stock Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for earnings per share has declined from $2.06 to $2.04 for 2026 over the past 30 days and from $3.14 to $3.12 for 2027.
Estimate Movement for TEVA
Image Source: Zacks Investment Research
TEVA Stock: Long-Term Hold, Short-Term Exit
Teva faces its share of challenges, like a heavy debt burden, pricing pressure and intense competition in the generics business and litigation and legal overhangs. However, it is successfully transitioning from a pure-play generics company to a more diversified biopharma company.
Teva’s newer drugs, Austedo, Uzedy and Ajovy, are showing strong top-line growth and are contributing a much larger share of revenues. Although sales of the Generics unit declined in the first half of 2026, the company is experiencing strong performance from biosimilars and new generic products. Its top-line growth has accelerated from $4.9 billion in 2022 to an expected $16.5 billion to $16.8 billion in 2026.
The company’s margins have been expanding while it has steadily reduced debt. The company expects net savings of approximately $700 million by 2027 from its restructuring and cost savings initiatives. Management is targeting a 30% adjusted operating margin by 2027.
Teva has also been reducing leverage, improving cash generation and maintaining financial discipline while simultaneously investing in growth. Teva’s improving financial profile has earned successive credit-rating upgrades.
TEVA’s stock price appreciation in a year, decent valuation, improving branded and biosimilar pipeline and the prospect of growth in sales and profits are good enough reasons for long-term investors to stay invested in this. However, near-term profitability remains affected by costs related to Teva’s acquisition of Emalex Biosciences. Short-term investors may consider exiting this Zacks Rank #4 (Sell) stock for now as estimates are declining.
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