Goldman Sachs likes Teva Pharmaceuticals (TASE, Nasdaq: TEVA). It likes the Israeli generic drugs giant enough to repeat a Buy rating for its stock and raise earnings forecasts for the year 2007.

The bank is not afraid in its update to rate Teva a Buy even though the stock has already risen 33% this year while the benchmark S&P-500 index has gained a mere 6%.

At month-end Teva will be announcing its second-quarter results. Goldman Sachs got in ahead of the event and raised its estimate to 58 cents earnings per share in the quarter, and $2.28 per share for the year 2007.

Management's estimate range is $2.20 to $2.30 for the year, Goldman Sachs points out, then writes: "Net, Teva remains a top idea across our 28-stock universe with what we view as attractive upside in shares".

The factors that could lead Teva to outperform expectations include a launch of generic Lotrel, a medicine to beat high blood pressure that Teva released on May 18.

Goldman Sachs also projects that its copycat version of Oxycodone ? a powerful and addictive opioid used to relieve moderate to terrible pain that is also popular among drug abusers - will be producing more income for Teva. Also, the general volatility in the generic subsector has subsided, Goldman Sachs says.

The bank is also counting on ProAir, an inhaler that Teva inherited when buying Ivax Corp. Sales of ProAir have handily beaten expectations. Goldman Sachs notes that ProAir sales benefited "dramatically" from Teva marketing combined with the transition from inhalers that destroy the ozone layer, to environmentally-friendly ones.

The investment bank's 12-month price target for Teva is $48, which is a substantial 15% above its present market cap on Nasdaq and the Tel Aviv Stock Exchange.