Teva Shares Continue Decline Amid Market Volatility and Sector Comparisons
The recent trading week on Wall Street ended with a broad decline, with major indices falling between 1% and 2.9%. The S&P 500 dropped 0.9% over Thursday and Friday, the Dow Jones lost 1%, and the Nasdaq led losses with a 2.9% decrease. Among Israeli-related stocks, Teva Pharmaceutical's shares fell about 2.8% last week, trading down on four out of five days. Since early July, Teva's stock has mostly declined, with only a few exceptions.
Teva, managed by Richard Francis, is valued at approximately $37.3 billion across its New York and Tel Aviv listings. Uri Hershkovitz, managing partner at hedge fund Bennu Pharma, sees no specific reason for the stock's weakness but suggests possible factors such as market anticipation ahead of vitiligo drug results or a general biotech sector pullback. Hershkovitz notes that Teva's valuation has historically been benchmarked against Viatris, whose price-to-earnings ratio was just above 5 for 2030 earnings, which limited Teva's relative valuation. However, with recent IPOs and price increases in other generic drug companies like Sandoz, Apotex, and Amneal, which trade around a 9.25 multiple, and original drug makers trading at about 11, Hershkovitz estimates Teva's fair multiple at 10 or higher due to its growing original drugs segment. He sets a price target of $42 per share, about 31% above current levels, and maintains a buy recommendation.
Separately, Mobileye, led by founder Prof. Amnon Shashua, is set to report its Q2 earnings this Thursday. Analysts expect $482 million in revenue and a non-GAAP net profit of 6 cents per share, marking a decline from the previous year. Mobileye recently announced plans to independently operate an autonomous ride service in a U.S. city starting in 2027. The stock rose 2.8% on Friday and has rebounded 40.5% since its late March low, with a market cap near $7.8 billion. Analyst opinions are mixed, with 13 positive, 15 neutral, and 1 negative rating, and an average price target implying a 37% premium.
Kaltura's stock surged 6.9% on Friday after a modest 0.8% rise Thursday but fell 10.8% in after-hours trading. The company, led by co-founder Ron Yekutiel, provides video management systems and is valued at $209 million. Despite a 15.2% year-to-date decline, Kaltura's shares have gained 28.7% since April lows. It is expected to report Q2 earnings on August 5, with modest revenue growth and a slight non-GAAP net loss. A recent investor site highlighted Kaltura as a promising low-priced stock, noting its reduced losses and expanding AI product offerings that could drive future growth.
