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Valeant Gets Closer To Left's $50 Target After New Accounting Fears

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Valeant Gets Closer To Left's $50 Target After New Accounting Fears
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Valeant Pharmaceuticals Intl Inc. (NYSE: VRX) shares plunged nearly 9 percent in Monday's after-hours trading session following word the company may have to restate financial results, before recovering slightly. The potential restatement, according to sources, would come on the heels of a recent probe into the company's operations.

Philidor To Blame?

As reported by Dow Jones during Monday's post-market trade, the periods in question span from late 2014 to early 2015.

The DJ source suggested an issue in reporting results may have stemmed from accounting for sales to Philidor RX Services, a recently troubled specialty pharmacy segment Valeant dropped its relationship with last fall.

Left's Thesis And Maris' Target

Valeant's relationship with Philidor was the heart of Citron and Andrew Left's short thesis on the stock in October 2015; the firm said Valeant used the segment to create "phantom" sales.

Valeant later denied the report, and in the time since, many Wall Street analysts have stuck by the stock's side. The notable exception is Wells Fargo analyst David Maris, who started the stock at Underperform last Friday.

Maris forecast 42 percent downside at the time of his report, showing that historical data indicated a greater-than-50 percent chance of bankruptcy.

Monday's after-hours move added to a nearly 11 percent decline in Valeant shares over the intraday session and a 10 percent plunge on Friday following the scathing Wells Fargo note.

With shares of Valeant last trading at $70.25, the stock is down more than 25 percent from the start of 2016 and has fallen even further since Citron's short thesis was unveiled near the $150 level.

The firm's original price target on the stock was $50.

Latest Ratings for VRX

DateFirmActionFromTo
Nov 2016MizuhoDowngradesNeutralUnderperform
Nov 2016Morgan StanleyMaintainsOverweight
Nov 2016Rodman & RenshawDowngradesBuyNeutral

View More Analyst Ratings for VRX
View the Latest Analyst Ratings

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