When selling pressure capitulated in June, Teva traded as low as $7.09. The recent Q2 2023 earnings report and a commitment not to separate its brands and generic business are positive catalysts.
CEO Richard Francis said that Teva does not plan to separate its brands and generics business. Doing so does not add value for investors. It is the opposite. The company has plenty of synergies among its business lines. It may leverage its R&D and manufacturing. This expands its commercial footprint, expanding profit margins.
Teva enjoys over $8 billion annually from its generics business.
In Q2, Teva posted revenue of $3.9 billion, up by 2% Y/Y. It expects revenue in the range of $15.0B to $15.4B this year.
In the consumer goods space, Newell Brands (NWL) is out of the dog house. The Sharpie marker maker posted revenue falling by 13.0% to $2.2 billion. Margin fell to 9.1%, down from 14.0% Y/Y. The cash improvement meets management’s previous guidance.
For months before the report, insiders accumulated NWL stock. The CEO and CFO both have over 300,000 shares.
Your Takeaway
The worst is behind NWL and TEVA stock. Value investors should consider both companies at current levels.