TEVA PHARMACEUTICAL - DCF ANALYSIS

INTRINSIC VALUE

$76.95

per share

CURRENT PRICE

$18.50

UPSIDE

+316%

vs market

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DCF BASELINE SOURCE

EDIT MODEL

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UPLOAD A NEW SEC FILING

Drops new numbers into the FROM THE FILING block below. Assumptions are left alone — you maintain those yourself. Nothing changes until you press APPLY CHANGES.

DROP A 10-Q OR 10-K HERE drag the .htm file onto this box, or click to browse

Use the main document from EDGAR (the large .htm with the financial statements). Reads inline XBRL, so filings from about 2019 onward work.

FROM THE FILING

Reported figures. A new filing overwrites these.

Input	Value	Status	Source

ASSUMPTIONS — NOT IN THE FILING

Judgement and market data. Uploading a filing never touches these.

Input	Value	Status	Used in	Note

Business segment mix → unlevered beta

Enter each segment as a % of revenue. Anything short of 100% is picked up automatically by a residual Other row at the generic beta.

Segment	% of Revenue	Unlevered Beta

Geographic mix → country risk premium

Same idea — percentages, with a residual Other row at the generic CDS spread.

Region	% of Revenue	CDS Spread (%)

CALCULATED FROM THE ABOVE

Outputs, not inputs. Change the bases above and these move.

Value	Result	Built from

Changes are saved in this browser.

1. BETA CALCULATION - COST OF EQUITY

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1.1 Business Segment Mix & Unlevered Beta

Segment	% of Revenue	Unlevered Beta	Weighted Contribution

Source: Teva Form 10-Q (Q2 2026), Note 15b Segment revenues by major products and activities; MD&A Other Activities. This table is NOT auto-updated when a new filing is dropped in — segment mix and industry betas require judgment and must be edited by hand.

Teva SEC Filings TEVA on Yahoo Finance

1.2 Relevering Beta for Teva's Capital Structure

Teva Capital Structure (June 30, 2026):
Total Debt: $16,593M | Market Value of Equity: $22,034M | Tax Rate: 23%

Levered Beta = Unlevered Beta × [1 + (1 - Tax Rate) × D/E]
= 0.769 × [1 + (1 - 0.23) × (16,593/22,034)]
= 0.769 × [1 + 0.77 × 0.753]
= 0.769 × 1.580
= 1.214

2. DIVIDEND DISCOUNT MODEL - MARKET RISK PREMIUM

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2.1 S&P 500 Dividend Discount Model

Metric	Value

2.2 DDM Formula - Solving for Rm

2.3 Market Risk Premium

3. COUNTRY RISK ASSESSMENT

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3.1 Geographic Exposure & CDS Spreads

Region	% of Revenue	CDS Spread (bps)	Country Risk Premium

Source: Teva Form 10-Q (Q2 2026), Note 15a Segment information. Other Activities is primarily Anda (US distribution, $792M) and is assigned the US spread. Israel-domiciled operations are reported within International Markets.

Teva SEC Filings

3.2 Weighted Average Country Risk Premium

4. COST OF EQUITY CALCULATION

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4.1 Cost of Equity (CAPM)

Cost of Equity = Rf + β × (Rm - Rf) + Country Risk Premium

Where:
• Rf = 4.2% (US 10-Year Treasury from Section 2)
• β = 1.214 (Levered Beta from Section 1)
• Rm - Rf = 2.05% (Market Risk Premium from Section 2)
• Country Risk Premium = 0.38% (from Section 3)

Calculation:
Cost of Equity = 4.2% + (1.214 × 2.05%) + 0.38%
= 4.2% + 2.489% + 0.38%
= 7.069%

5. COST OF DEBT CALCULATION

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5.1 Teva Debt Structure (10-Q Note 7)

Instrument	Coupon	Maturity	Carrying Value ($M)
Senior notes USD 3,500M	3.15%	2026	1,798
Senior notes EUR 700M	1.88%	2027	798
Sustainability-linked USD 1,000M	4.75%	2027	649
Sustainability-linked EUR 1,100M	3.75%	2027	1,255
Senior notes USD 1,250M	6.75%	2028	1,250
Senior notes EUR 750M	1.63%	2028	856
Sustainability-linked USD 1,000M	5.13%	2029	1,000
Sustainability-linked USD 600M	7.88%	2029	398
Sustainability-linked EUR 800M	7.38%	2029	758
Sustainability-linked EUR 1,500M	4.38%	2030	1,714
Senior notes USD 700M	5.75%	2030	696
Sustainability-linked USD 500M	8.13%	2031	500
Sustainability-linked EUR 500M	7.88%	2031	572
Senior notes EUR 1,000M	4.13%	2031	1,138
Senior notes USD 500M	6.00%	2032	496
Senior notes USD 789M	6.15%	2036	784
Senior notes USD 2,000M	4.10%	2046	1,988
TOTAL SENIOR NOTES	4.77% wtd avg	5.1 yrs avg	16,650

Source: Teva Form 10-Q (Q2 2026), Note 7 Debt. Total debt including debt issuance costs = $16,593M. Fair value of senior notes = $16,586M, i.e. trading essentially at par, so market yield ≈ weighted average coupon.

Teva SEC Filings

5.2 Cost of Debt (Derived from Filing)

Pre-Tax Cost of Debt = Weighted Average Coupon on Senior Notes

= Σ (Coupon × Carrying Value) / Total Carrying Value
= 793.7 / 16,650

= 4.77%

Cross-check — Net Interest Expense:
Q2 2026 net interest expense $195M × 4 = $780M annualized
780 / 16,593 = 4.70% ✓

After-Tax Cost of Debt = 4.77% × (1 - 0.23) = 3.67%

6. WEIGHTED AVERAGE COST OF CAPITAL (WACC)

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6.1 Capital Structure

Component	Value ($M)	Weight
Market Value of Equity	22,034	57.04%
Market Value of Debt	16,593	42.96%
Total Capital	38,627	100.00%

6.2 WACC Calculation (Using Values from Previous Sections)

WACC = (E/V × Cost of Equity) + (D/V × Cost of Debt × (1 - Tax Rate))

Where:
• E/V = 57.04% (from capital structure above)
• D/V = 42.96% (from capital structure above)
• Cost of Equity = 7.069% (from Section 4)
• Cost of Debt = 4.77% (from Section 5)
• Tax Rate = 23%

Calculation:
WACC = (0.5704 × 7.069%) + (0.4296 × 4.77% × 0.77)
= 4.032% + 1.578%
= 5.61%

7. FREE CASH FLOW ANALYSIS

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7.1 Normalized Base Free Cash Flow (H1 2026 Annualized)

Line Item	H1 2026 ($M)	Annualized ($M)	Source

Source: Teva Form 10-Q for the quarterly period ended June 30, 2026.

Teva SEC Filings

7.2 FCF Projection Assumptions (5-Year Forecast)

Years 1-3 (High Growth Phase):
- Recovery from opioid settlement headwinds
- AUSTEDO ramping: H1 2026 revenue $1,275M, up 40% vs H1 2025
- UZEDY (schizophrenia LAI) H1 2026 revenue $140M, up 51%
- AJOVY H1 2026 revenue $440M, up 50%
- Assumed FCF Growth Rate: 8% per year

Years 4-5 (Moderate Growth Phase):
- Generic erosion continuing (US generics H1 2026 $1,272M, down 30% on lenalidomide)
- Competitive pressure on innovative portfolio
- API divestiture process removes a low-growth segment
- Assumed FCF Growth Rate: 4% per year

Terminal Growth Rate: 2.1% (equals long-term GDP growth)
Rationale: Conservative terminal growth correlates with overall economy long-term growth.

8. EXPLICIT FORECAST PERIOD (5 YEARS)

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8.1 Year-by-Year FCF Projections

Year	Growth Rate	FCF ($M)	Calculation

8.2 Terminal Value Calculation

Terminal Value = FCF(Year 5) × (1 + Terminal Growth Rate) / (WACC - Terminal Growth Rate)

Where:
• FCF(Year 5) = $4,026M
• Terminal Growth Rate = 2.1% (from Section 7)
• WACC = 5.61% (from Section 6)

Terminal Value = 4,026 × 1.021 / (0.0561 - 0.021)
= 4,111 / 0.0351
= $117,135M

9. DCF VALUATION MODEL

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9.1 Discounted Cash Flow to Enterprise Value

Year	FCF ($M)	Discount Factor	PV ($M)

9.2 Enterprise Value & Equity Value

Enterprise Value (from 9.1) = $104,610M

Less: Net Debt (Debt - Cash)
Total Debt = 16,593 | Cash = 3,655 | Net Debt = 12,938

Equity Value = Enterprise Value - Net Debt
= 104,610 - 12,938
= $91,672M

9.3 Intrinsic Value Per Share

Shares Outstanding = 1,191 million (fully diluted, 10-Q MD&A "Share Count for Market Capitalization")

Equity Value (from 9.2) ÷ Shares Outstanding
= 91,672 ÷ 1,191
= Intrinsic Value Per Share = $76.95

Current TEVA Price Teva SEC Filings

SHOURJO MAJUMDER'S PORTFOLIO

UPLOAD A NEW SEC FILING

FROM THE FILING

ASSUMPTIONS — NOT IN THE FILING

Business segment mix → unlevered beta

Geographic mix → country risk premium

CALCULATED FROM THE ABOVE

1.1 Business Segment Mix & Unlevered Beta

1.2 Relevering Beta for Teva's Capital Structure

2.1 S&P 500 Dividend Discount Model

2.2 DDM Formula - Solving for Rm

2.3 Market Risk Premium

3.1 Geographic Exposure & CDS Spreads

3.2 Weighted Average Country Risk Premium

4.1 Cost of Equity (CAPM)

5.1 Teva Debt Structure (10-Q Note 7)

5.2 Cost of Debt (Derived from Filing)

6.1 Capital Structure

6.2 WACC Calculation (Using Values from Previous Sections)

7.1 Normalized Base Free Cash Flow (H1 2026 Annualized)

7.2 FCF Projection Assumptions (5-Year Forecast)

8.1 Year-by-Year FCF Projections

8.2 Terminal Value Calculation

9.1 Discounted Cash Flow to Enterprise Value

9.2 Enterprise Value & Equity Value

9.3 Intrinsic Value Per Share