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Stifel Sees A Long Road To Stabilization At Valeant

Stifel Sees A Long Road To Stabilization At Valeant
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Valeant Pharmaceuticals Intl Inc (NYSE: VRX) reported its 1Q16 results and reset its guidance once again. Stifel’s Annabel Samimy maintained a Buy rating for the company, while reducing the price target from $65 to $55. The analyst commented that although Valeant faces several challenges and recovery is likely to be slow, the company has “the assets and tools to stabilize its business and rebuild its reputation.”

Valeant reported its 1Q16 revenues at $2.37 billion, marginally ahead of the consensus expectation of $2.35 billion. EPS came in at $1.27, significantly missing the consensus estimate of $1.36.

Related Link: Valeant's Debt In 2020 'May Be Too High A Hurdle'

Updated Guidance Conservative

Samimy said Valeant’s 2016 guidance reflects “stabilization phase of recovery with no upside.” The company reduced its full-year revenue, adjusted EPS and EPS guidance from $11.0-$11.2 billion to $9.9-$10.1 billion, from $5.6-$5.8 billion to $4.80-$4.95 billion, and from $8.50-$9.50 to $6.60-$7.00, respectively.

Updated guidance reflected lowered revenue expectations for the Dermatology franchise and Xifaxan. Additional decreases are expected from rebates and volume-based discounts for Nitropress and Isuprel, Samimy noted.

“VRX has already initiated its plan to address the main concerns going forward which includes addressing negative ASPs and deploying a sales force to invigorate Xifaxan. We believe yesterday’s updated guidance is conservative and resolution of key issues surrounding the Dermatology franchise and Xifaxan are not reflected in the updated numbers and present upside,” the analyst wrote.

Latest Ratings for VRX

Sep 2016Deutsche BankInitiates Coverage onHold
Aug 2016Morgan StanleyUpgradesEqual-WeightOverweight
Aug 2016MizuhoUpgradesUnderperformNeutral

View More Analyst Ratings for VRX
View the Latest Analyst Ratings

Posted-In: Annabel Samimy StifelAnalyst Color Long Ideas Price Target Reiteration Analyst Ratings Trading Ideas Best of Benzinga


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