Barclays Raises Valeant Pharmaceuticals' Price Target

Barclays raised its price target on Valeant Pharmaceuticals Intl Inc VRX from $149 to $179 Friday and maintained a Buy rating.

Analyst David Steinberg noted that the “surprisingly strong rev guidance (implied 14-15 percent Y/Y growth) is ~$150M ahead of the co’s prior 3Q14 update and should be driven in part by higher than expected rev from key new product launches.”

“The outstanding launch of Jublia (annualizing at $200M+ just 6 mos post launch), the breadth of the ophthalmic business (led by Ultra), and the new topical acne drug Onexton are all expected to be major contributors. Further, ~$200M in incremental sales are expected from new acquisitions (Marathon, Nicox, and Croma). In our view, the strength of the company’s underlying business continues to be underappreciated as ~$500M is expected from new products in FY15 – which constitutes pure organic growth,” according to Steinberg.

The analyst report was also positive due to “an acquisition-light FY14, the co’s leverage ratio is now just 3.5x, which should offer more flexibility for VRX to pursue its acquisition strategy.”

The price target of $179 was based on 14.8x the firm’s FY16 EPS figure of $12.12.

CRT also had positive comments for Valeant Pharmaceuticals on Friday.

Valeant Pharmaceuticals closed Friday at $153.58, down 0.34 percent.