Market Overview

JPMorgan Isn't Concerned About Valeant's Ad Hoc Committee At All; Says Sum-Of-The-Parts Shows Upside


Despite the plethora of bad press lately, it's not all bad news for Valeant Pharmaceuticals Intl Inc (NYSE: VRX).

On Tuesday morning, the biopharmaceutical company announced that its Ad Hoc Committee, which has been engaged in reviewing the Philidor matter in addition to other accounting concerns, has completed its review. The conclusion of the review came as a breath of fresh air, with no additional documents requiring further attention, according to the Ad Hoc Committee.

As the Committee's duties have come to a close, the group will disband and render oversight responsibilities to Valeant's 12 independent directors.

Related Link: Valeant Creditors Reportedly "Balking" At Revised Lending Agreement; Investors Concerned

Analysts' Take

Following this announcement, JPMorgan analysts led by Chris Schott noted that the Ad Hoc Committee's findings de-risk the stock. In addition, Schott sees additional catalysts that could further de-risk the story. "We see focus returning to both fundamentals (quarterly results/cash flows) and SOTP valuation, where we see Valeant's current asset base representing meaningful upside vs. today's share price," the analyst elaborated.

"Additionally, we would not rule out asset sales over time as the company looks to accelerate its de-levering, which we believe would be well received by investors."

Schott summarized, "We are encouraged by this update, and continue to see filing the 10-K (reaffirmed on or before April 29) as a key catalyst for VRX shares. Moving forward, we will look for improvements in quarterly results and cash flows (starting in 2Q/16), and remain OW shares as we believe SOTP value is well above Valeant's current share price."

JPMorgan currently rates Valeant at Overweight; the stock was recently seen up more than 8 percent on the day, trading at $28.21.

Latest Ratings for VRX

Jun 2018DowngradesBuyHold
Jun 2018UpgradesEqual-WeightOverweight
May 2018UpgradesNeutralBuy

View More Analyst Ratings for VRX
View the Latest Analyst Ratings

Posted-In: Analyst Color Biotech News Health Care Reiteration Analyst Ratings Movers General


Related Articles (VRX)

View Comments and Join the Discussion!

Latest Ratings

VIACJP MorganReinstates50.0
NUVASVB LeerinkMaintains92.0
SRPTCantor FitzgeraldMaintains211.0
LULUGoldman SachsMaintains219.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at

Mid-Day Market Update: Intercept Pharmaceuticals Gains Following Release of FDA Advisory Committee Documents; Godaddy Shares Decline

Lululemon's Plan To Double Sales By 2020 Might Not Be Ambitious Enough