Analysts say they have recently published a list of eight of the most underrated healthcare stocks. In this article, we will look at where Teva Pharmaceutical Industries Limited (NYSE: TEVA) plays against other most underrated medical stocks, according to analysts.
Medical prices and spending are rising in the US. According to the Centers for Medicare and Medicaid Services, healthcare costs in the United States reached between 7.5% and $4.9 trillion between 2022 and 2023. The healthcare sector accounted for 17.6% of the US economy in 2023, up 17.4% from 2022. Two major drivers of this rise are the expansion of private health insurance and Medicare.
More and more US companies are turning to more and more companies, as they are asking China to trade on the next promising chemicals, if the impact of tariffs on this ongoing trend is a major point of conflict in healthcare businesses, whether obese or in cancerous regions. On February 7th, Versant Ventures Managing Director Carlo Rizzuto discussed how it will affect CNBC's “Fast Money” healthcare involvement. According to Rizzuto, tariffs could have two effects on the industry. The first is a product created in China and released to the US or other markets. To understand how tariffs affect such trade operations, the industry needs to observe how tariffs are implemented in the market.
Second, and more specifically, China serves as the main foundation for contract production and research in the US health sector. So anything that increases its costs can make the market even more difficult. Management in the healthcare industry, already under pressure from investors, will not improve with increased costs.
The majority of medical institutions use Chinese CROs or manufacturing partners in some capacity during the research and development stage. Therefore, it has a major impact on how pharmaceutical and biotech businesses operate in the country. This pattern occurs very often in businesses of all sizes.
Simply put, healthcare companies are unable to reissue all of their externalized R&D and production to the US, as they do not have the infrastructure needed to manage relocations. As a result, it is difficult to see how such a large-scale reuse occurs. The cost to achieve this goal can be calculated linearly by the number of tariffs implemented.
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McKinsey predicts healthcare EBITDA will increase from a baseline of $676 billion in 2023 to $987 billion in 2028. Software platforms are essential to the healthcare ecosystem as they allow payers and providers to function more efficiently in complex environments.
Technological innovations (such as generator AI and machine learning) continue to provide opportunities for stakeholders across all fields by automating processes, fostering data connectivity, and generating actionable insights. According to McKinsey, special pharmacy revenues are expected to grow significantly due to higher utilization and pipeline expansion (like cancer). Increased use of specialty drugs has contributed to the continued growth of the profit pool of specialized pharmacies.
Our methodology uses a screener to filter healthcare stocks by forward PE ratios below 15, with analyst rise of over 20%. We then ranked stocks based on analysts as of March 30, 2025.
Why are hedge funds interested in the stocks they accumulate? The reason is simple. Our research shows that mimic the top stock picks of the best hedge funds can outperform the market. The quarterly newsletter strategy has chosen 14 small and large caps per quarter, returning 373.4% since May 2014, surpassing the benchmark by 218 percentage points (see more here).
Is Teva Pharmaceutical Industries (TEVA) the most underrated medical stock, according to analysts?
There are close-up shots of different types of medicines on the table, showing the specialist and general products offered by pharmaceutical companies.
Price target rise: 24%
Teva Pharmaceutical Industries Limited (NYSE: TEVA) is a global leader in the pharmaceutical industry, focusing primarily on popular drugs. The company is the largest producer of generic drugs, with over 3,500 items in various therapeutic categories. The global development, production and distribution of both generic and specialist drugs is all part of the company's business plan. The company produces 76 billion tablets and capsules per year, touching about 200 million people every day in North America, Europe and elsewhere.
Teva Pharmaceutical Industries Limited (NYSE: TEVA) has made great strides in 2024. Revenue growth was driven by key items such as Austedo, Uzedy and Ajovy, with Ajovy expanding 18%, Uzedy exceeding its sales target, and Austedo witnessing 34% sales.
The company's ingenious pipeline is encouraging. Late drugs, including olanzapine, Duvakitug and ICS/Saba Dari, are now entering clinical trials, increasing the likelihood of future expansion. The corporate API business has grown modestly, but the generic business has also seen excellent performance. This was driven by product launches and enhanced operational efficiency. Given its strong growth and solid finances, Teva is often considered one of the most undervalued stocks in the health sector, offering potential opportunities for investors.
Teva Pharmaceutical Industries Limited (NYSE: TEVA) announced revenue of $16.5 billion for the fourth quarter of 2024. This is an increase of 9% from the previous year. Adjusted EBITDA also increased by 9%, while non-GAAP EPS increased by 10%. This extension included all business areas, including APIs, generics, and new products. Strong revenue performance combined with efficient cost management is reflected in improved gross profitability.
Overall, TEVA ranks 8th in the list of the most underrated medical stocks, according to analysts. We acknowledge the potential of healthcare companies, but our belief lies in the belief that AI stocks offer higher returns and hold a greater commitment to doing it within a shorter time frame. If you're looking for AI stocks that are more promising than Teva but are trading under five times the revenue, check out our report on the cheapest AI stocks.
Read next: According to the billionaire, buy 20 best AI stocks to buy now and the best best stocks to buy now.
Disclosure: None. This article was originally published on Insider Monkey.
