Teva Pharmaceutical's Turnaround Is Working. Here's When to Buy the Stock.

Teva Pharmaceutical Industries (NYSE: TEVA) will unveil its first-quarter results this Wednesday, April 29. Many Teva trackers will be watching for validation of the company's continuing strategic pivot. Perhaps it's a good idea to buy the veteran pharmaceutical company's stock in advance of the event. Let's explore.

A pivotal period

Teva's transformation strategy, the self-descriptive "Pivot to Growth," was formally announced in 2023. For years, the company has been the world's top manufacturer of generic drugs. In the days when that healthcare segment was relatively limited, Teva ruled its niche. But success attracts competition, and with market share to fight for, margins (and thus profits) started to fall.

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Teva's solution was to prioritize the development and commercialization of its own proprietary medications. The company had always had such products on the market, but the strategy shift pushed these efforts to the forefront.

So far, the approach has worked. In fact, Teva recently developed its first blockbuster drug (i.e., one with annual sales above $1 billion). This hit product is Austedo, which treats two neuropathic movement disorders.

In 2025, the drug's global sales leaped 34% year over year in local currency terms to almost $2.3 billion. The company's two other main "innovative brands" also saw inspiring growth. Migraine treatment Ajovy's take grew by 3% to $673 million, while up-and-coming psychiatric drug Uzedy's sales sailed 63% higher to $191 million.

Teva's business still rests on a foundation of generics and biosimilars, which together comprised 54% of total revenue in 2025. That's why the company's top line rose a relatively modest 4% that year (to almost $17.3 billion). Luckily, these products are doing better than some might expect, given their comparatively low sale prices and the increased competition. Their sales increased 2% in 2025.

Future highflier

Since announcing Pivot to Growth, Teva has effectively built a broad pipeline featuring several high-potential drugs. These include colitis/Crohn's disease treatment Duvakitug and schizophrenia medication Olanzapine LAI.

Even in the final phases of development, medicines can take quite some time to earn approval and eventually reach pharmacy shelves. So to me, Teva's brightest future isn't in the short term, but in the years ahead, as these investigational programs (hopefully) yield commercialized products.

Analysts tracking Teva stock aren't expecting whiz-bang results from the company in the first quarter. Their consensus estimate for revenue ($3.79 billion) is almost 3% below the same period in 2025. Accompanying this is a collective forecast of a 12% slide in earnings per share (EPS), to $0.46.

The story is different with full-year 2027 projections, however, and that's revealing. That year's revenue is expected to bounce back, rising 4% over 2026 to nearly $17.2 billion, and EPS is expected to rise 17% to $3.13. Given the promising pipeline, I think the 2027 estimates might be conservative; meanwhile, growth could be more robust in the future.

Given all of the above, I wouldn't buy Teva stock before Wednesday's earnings release. A better play is to anticipate share price weakness post-earnings, then pull the lever. Even if the shares rise modestly, they'd still be a bargain given Teva's considerable future potential.

Eric Volkman 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.