Teva Earnings: Strong Sales From Generics and Key Drugs With Margin Improvement Make a Solid Quarter

No-moat Teva Pharmaceutical reported solid third-quarter earnings that came in higher than we had anticipated. Total sales were up 7.1% year over year thanks to strong performance across regions with generics in North America and Europe showing particularly solid growth. Management lifted full-year sales guidance to $15.1 billion-$15.5 billion from $15.0 billion-$15.4 billion after slightly raising sales expectation for Copaxone and other minor developments during the fourth quarter. These changes were not material enough to change our valuation, so we maintain our fair value estimate of $11.50 per share.