Why Teva Pharmaceutical Stock Is Sinking Today

Shares of Teva Pharmaceutical Industries (NYSE: TEVA) were slipping Wednesday. The company's stock lost 13.5% as of 1:15 p.m. ET. The leg down comes as the S&P 500 (SNPINDEX: ^GSPC) and Nasdaq Composite (NASDAQINDEX: ^IXIC) lost 0.5% and 0.9%, respectively.

Teva reported earnings before trading began on Wednesday. The positive growth wasn't enough to outweigh guidance for 2025, which disappointed investors.

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The numbers

The pharma giant reported sales of $4.2 billion for Q4 and $16.5 billion for fiscal year 2024, up from 2023's revenue of $15.9 billion. The numbers slightly exceeded expectations, driven by better-than-expected sales of its lineup of drugs targeting migraines, Huntington's disease, and schizophrenia.

Its earnings per share (EPS) for Q4 was $0.71, down significantly from Q4 2023's $1.00, but slightly exceeding an expected $0.70.

The real issue came from its forecast EPS for 2025. The high end of the range the company offered -- $2.65 -- comes in well below the expected $2.76.

What's next for Teva?

Teva is in the midst of what it calls its "Pivot to Growth strategy" and must continue to execute on its key components, notably its reorganization efforts to keep costs down, its focus on generics, and success in its research and development pipeline. The last of these initiatives comes with no guarantees of success, nor a clear timeline.

The company does, however, have some key drugs in later stages of trials, like its drug targeting ulcerative colitis and Crohn's disease. Though it looks promising, the company has its work cut out for it.

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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.