Teva Pharmaceutical's Path to $40: Three Key Growth Drivers

Teva's Resurgence: From Slump to Surge

Following a multi-year downturn, Israel-based pharmaceutical giant Teva Pharmaceutical Industries Limited (NYSE: TEVA) has experienced a remarkable turnaround. Over the last 12 months, its stock price has climbed more than 130%, prompting renewed optimism on Wall Street.

The sentiment is reflected in recent analyst coverage. In April, S&P Global surveyed 15 analysts regarding Teva's prospects; twelve of them rated the stock as a "buy" or "strong buy." The consensus suggests that specific upcoming events could propel the share price to $40 and potentially higher.

Catalyst One: FDA Approval for Olanzapine

A primary driver of this optimism is the regulatory progress surrounding Teva's new drug application (NDA) for TEV-749, an extended-release injectable suspension of olanzapine designed for adult schizophrenia treatment. The U.S. Food and Drug Administration (FDA) accepted the application roughly three months ago, with a decision expected later this year.

Umer Raffat, an analyst at Evercore ISI (NYSE: EVR), has identified this potential approval as Teva's "most meaningful catalyst." While olanzapine is already widely prescribed for schizophrenia, current long-acting formulations require a Risk Evaluation and Mitigation Strategy (REMS). This mandate forces administration in certified facilities with mandatory three-hour patient monitoring post-injection.

Teva's formulation aims to bypass these restrictions. By eliminating the REMS requirement, the drug could significantly improve patient adherence. Combined with Uzedy, another long-acting Teva product for schizophrenia and bipolar disorder, analysts project peak annual sales exceeding $2 billion.

Catalyst Two: Specialty Drug Momentum

Commercial momentum in Teva's specialty portfolio is accelerating, led by Austedo. Approved for tardive dyskinesia (TD) and Huntington's disease chorea, Austedo generated $2.26 billion in sales during 2025, marking a 34% year-over-year increase from the previous year.

Looking ahead, Teva forecasts Austedo revenue between $2.4 billion and $2.55 billion for the current year. Other key performers include:

• Ajovy: A migraine therapy that saw sales jump 30% year over year in 2025 to reach $673 million.
• Uzedy: Sales soared 63% to $191 million during the same period.

Catalyst Three: The Biosimilar Expansion

Teva is also capitalizing on a biosimilar boom, with plans to launch six new biosimilars in 2026 and 2027. This expansion positions Teva to challenge major competitors across several therapeutic areas:

• Amgen (NASDAQ: AMGN): Potential competition in bone disease drugs Prolia and Xgeva.
• Johnson & Johnson (NYSE: JNJ): Threats in the autoimmune market with Simponi and Simponi Aria biosimilars.
• Regeneron (NASDAQ: REGN): Potential approval for a biosimilar to the eye disease drug Eylea.

Jefferies (NYSE: JEF) views 2026 as a pivotal year for Teva to demonstrate its R&D pipeline's viability. However, the company already holds the industry's second-largest biosimilar portfolio, with additional products scheduled for launch in 2028 and beyond.

Risks and Valuation

While the outlook is positive, risks remain. A broader stock market crash could drag Teva down alongside other equities like Tesla. Specific setbacks, such as regulatory hurdles or slowing Austedo sales, could also halt momentum.

Conversely, the pipeline appears de-risked with several late-stage programs. Financially, Teva trades at a forward earnings multiple of just 11.7, characterizing it as a value stock.

While betting on Teva reaching $40 within the next 12 months is not guaranteed, the probability remains favorable. As noted by Keith Speights, who has no position in Teva: "I wouldn't bet the farm on Teva's share price reaching $40 within the next 12 months. However, I wouldn't bet against it happening, either."

Note: The Motley Fool Stock Advisor team recently identified their top 10 stocks for investors, and Teva was not included in that specific list. The Motley Fool maintains positions in Amgen, Evercore, Jefferies Financial Group, Regeneron Pharmaceuticals, S&P Global, and Johnson & Johnson.

Context

This analysis reflects market conditions as of April 2026, highlighting the transition of Teva from a distressed asset to a growth-oriented pharmaceutical company driven by regulatory approvals and specialty drug performance. The article was originally published by The Motley Fool on Yahoo Finance.

Takeaway

Teva Pharmaceutical is positioned for significant upside driven by three pillars: a potential REMS-free schizophrenia injection, robust sales in its specialty portfolio (Austedo, Ajovy, Uzedy), and an aggressive biosimilar expansion. While risks exist, the stock's low valuation and strong analyst support suggest a viable path toward $40 per share.