Deutsche Bank Suspends Valeant Rating, Says It Was 'Long Skeptical' Of Business Model


Deutsche Bank’s Gregg Gilbert suspending the rating and estimates for Valeant Pharmaceuticals Intl Inc VRX, citing the company’s plans to restate prior results, the delay in its 10-K filing, the removal of its prior guidance for 2016, and an ongoing Board investigation.

“We have long been skeptical of the VRX business model that had formerly depended heavily on fast-paced acquisitions, aggressive cost cutting, tax arbitrage, aggressive US price increases, and a heavy debt load,” analyst Gregg Gilbert wrote.

Valeant is now transitioning to becoming more of an “organic execution and de-leveraging story.” Therefore, it would become “increasingly important, if not crucial,” to be able to track the company’s financial performance, Gilbert mentioned.

Valeant’s shares have pulled back significantly, Gilbert said, while adding that the risk-reward profile of the stock “has become more interesting.”

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Posted In: Analyst ColorDeutsche BankGregg Gilbert
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