Teva: Lowering Uncertainty Due to Growing Innovative Portfolio, Strong Pipeline, and Debt Management

After reviewing Teva Pharmaceutical's outlook, we've upgraded our Morningstar Uncertainty Rating to High from Very High. Our $14.50 fair value estimate and no-moat rating are unchanged. Our previous analysis considered unfavorable generic drug pricing trends, declining sales of off-patent branded drugs, and a significant level of debt, and we had difficulty seeing how the firm could quickly offset these challenges. However, we have seen significant improvements in recent quarters, with many thanks to the new management team led by CEO Richard Francis, who joined the firm about a year ago.