Teva Pharmaceutical Industries Ltd. (TEVA) announced Wednesday that it's getting some well-deserved credit for cleaning up its balance sheet. S&P Global Ratings bumped the company's long-term issuer credit rating up to BB+ from BB with a stable outlook, while Moody's kept its Ba1 rating but switched the outlook to positive.

Translation: The rating agencies think Teva is actually getting its act together.

The Deleveraging Story

Here's what caught the agencies' attention. S&P noted that adjusted leverage dropped to 4.4x as of September 30, 2025, and they expect it to fall below 4.25x in the coming quarters. That's the kind of trajectory that earns you a higher rating.

Both agencies pointed to something even more impressive: after five years of declining revenues, Teva has actually returned to growth. The turnaround is being driven by strength in branded medicines and stabilization in the generics business, which had been dragging the company down for years.

Moody's particularly liked the momentum in Teva's branded drug franchises and the pipeline of upcoming branded and biosimilar launches. These products should help offset the ongoing pressure in generics, where competition remains brutal.

The really interesting part? With leverage projected to trend toward 3.5x over the next 12 to 18 months, Moody's said the company could be in line for another upgrade. That would move Teva closer to investment-grade status, which would be a remarkable achievement given where this company was just a few years ago.

Eli Kalif, Teva's CFO, didn't hold back in his enthusiasm: "This upgrade is a powerful testament to our strategic vision and disciplined execution, especially coming at the heels of multiple upgrades in recent months. By driving our Pivot to Growth strategy, prioritizing robust cash flow management, and rigorously allocating capital, we have demonstrated unwavering commitment to deleveraging and sustainable business growth. These results clearly show how our focused strategy is delivering tangible value for Teva and positioning us for continued success."

The Numbers Behind the Optimism

Teva backed up the credit upgrade news with solid third-quarter results on Wednesday. The company reported total revenue of $4.48 billion, comfortably beating analysts' expectations of $4.35 billion.

Revenues climbed 3% year-over-year in U.S. dollars, or 1% in local currency. The real star of the show was the branded medicines portfolio, where revenues jumped 33% in local currency to $830 million. That's the kind of growth that makes Wall Street pay attention.

Teva Pharmaceutical raised its fiscal year 2025 adjusted earnings guidance from a range of $2.50 to $2.60 per share to $2.55 to $2.65 per share. The analyst consensus was sitting at $2.58, so the new range straddles that nicely.

The company also narrowed its 2025 sales guidance, taking the range from $16.8 billion to $17.2 billion down to $16.8 billion to $17 billion. The consensus estimate was $16.89 billion, which falls comfortably within the new range.

Stock Performance: Teva Pharmaceutical shares were up 0.76% at $31.78 at the time of publication on Wednesday. The stock hit a new 52-week high on the news, marking a significant milestone for the company's comeback story.