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Investing.com -- Goldman Sachs initiated coverage on U.S.-listed generic pharmaceutical companies with Buy ratings on Teva Pharmaceutical Industries (NYSE:TEVA) and Amneal Pharmaceuticals (NASDAQ:AMRX), and a Neutral rating on Viatris, citing improving fundamentals, strong free cash flow, and undemanding valuations.
The bank said the sector has faced recent volatility from both company-specific earnings guidance and broader policy concerns, including tariffs and U.S. drug pricing policy.
However, Goldman sees long-term potential as these companies shift toward complex generics, biosimilars, and branded drugs that offer stronger margins and durability.
“while the pace of legacy product erosion remains the key risk to near-term top-line growth and tariffs represent an overhang on margins, we are optimistic on the forward outlook,” Goldman analysts said in a note.
The firm highlighted Teva’s branded drug portfolio as a key growth engine, supported by positive clinical updates and potential valuation upside. Amneal, it said, has shown consistent execution and strategic agility, particularly given its smaller scale.
Both Teva and Amneal are expected to outperform earnings expectations.
For Viatris, Goldman maintained a Neutral stance, pointing to the need for greater clarity on long-term growth and pipeline execution, though it noted potential upside from business development and branded assets.
The analysts also expect the group to generate strong free cash flow, which could help support debt reduction, capital return, and strategic acquisitions.
Despite macro risks, Goldman said U.S. generic drug pricing appears stable and sees tariff impacts on margins as “manageable.”
The coverage comes as the sector faces ongoing policy uncertainty under the new U.S. administration, particularly on regulatory matters affecting generic drugs.
