Market Overview

Stifel Sees A Long Road To Stabilization At Valeant

Share:
Stifel Sees A Long Road To Stabilization At Valeant
Related VRX
TD Ameritrade Index Indicates Retail Investors Are At Their Most Bullish Point Yet
Investor Movement Index December Summary
FDA launches new program to boost transparency of clinical data used to support approvals (Seeking Alpha)

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

DateFirmActionFromTo
Dec 2017JP MorganDowngradesNeutralUnderweight
Nov 2017Deutsche BankMaintainsHold
Nov 2017BMO CapitalMaintainsMarket Perform

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

 

Related Articles (VRX)

View Comments and Join the Discussion!