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Aegis Capital Boosts PT on Valeant Pharma (VRX); Sees Management Executing 'Ambitious' Long-Term Plan

January 8, 2014 11:09 AM EST Send to a Friend
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Aegis Capital maintains its Buy rating on Valeant Pharmaceuticals (NYSE: VRX), but raises its price target from $140 to $160 on Wednesday.

Analyst Raghuram Selvaraju said the move was largely in part due to recent strength in Valeant peer companies and expectations that Valeant's management will continue to execute on its aggressive and ambitious long-term strategic plan.

Selvaraju said, Our 2013 estimates have been revised to $6.15 from $6.11 in cash earnings per diluted share, while current guidance is for cash diluted EPS of $6.11 - $6.16. Our 2014 cash diluted EPS has been reduced from $9.05 to $8.73, following the issuance of Valeant's earnings and revenue guidance for the year. The analyst also sees FY14 top-line revenue of $8.4 billion.

Valeant management believes that the company can ascend to the ranks of the top five pharmaceutical firms in the world by the end of 2016, which in management's view implies an increase in market cap of roughly three-fold, to $150 billion, Selvaraju noted. In our view, the firm is likely to be required to generate approximately $25 billion in top-line annual revenue in order to command such a substantial valuation.

For 2014, Valeant is expected to have a busy year with at least 12 product launches. Many are line extensions, but Selvaraju notes that key debuts include Jublia (efinaconazole) for nail bed infections; Neotensil for the removal of under-eye bags; and Zeus, the brand name for a new type of novel silicon hydrogel-based disposable contact lens.

For an analyst ratings summary and ratings history on Valeant Pharmaceuticals click here. For more ratings news on Valeant Pharmaceuticals click here.

Shares of Valeant Pharmaceuticals closed at $125.35 yesterday, with a 52 week range of $60.33 - $125.95.




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