HSBC has revised its price target for Teva Pharmaceutical Industries (IL:TEVA, Financial), reducing it from $24 to $20 while maintaining a Buy rating on the stock. The decision comes amidst concerns over various economic and legislative challenges that may affect the biopharma sector's earnings.
Analysts at HSBC have highlighted the risk posed by potential U.S. tariffs, which, in conjunction with a significant patent expiration phase and hurdles from the Part D/Inflation Reduction Act, may exert downward pressure on biopharma profits. Their analysis indicates that, should a 25% tariff be imposed, the innovative pharma segment could experience an earnings decline of approximately 6% to 14%.
Further scrutiny of financial accounts and supply chains suggests that additional earnings risks could arise from tax rate changes or other structural adjustments, depending on the specifics of the tariff implementation. HSBC's revised outlook reflects these complex factors, emphasizing the need for vigilant monitoring of the evolving economic landscape affecting Teva (IL:TEVA, Financial).
