Teva Pharmaceutical's (TEVA) cost-optimization plan, expected to be announced in May, will likely offer at least about $750m in benefits, which could help offset the company's upcoming generic Revlimid EBITDA loss, UBS said in a note to clients Monday.

The investment firm said that, after a post Q4 sell-off, Teva shares are trading at about 5 times 2026 consensus estimates for its EPS "which makes us believe there is no margin expansion priced-in at these levels."

However, the company's management is confident it can grow its EBITDA through "strong topline growth and cost optimization," the note said.

UBS said the "Revlimid LOE will have a greater impact than what we previously anticipated," however, on Teva's Q1 call it will "look for detailed cost optimization plan to address this impact."

UBS reiterated its buy rating on Teva and lowered the company's price target to $24 from $27.

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