BTIG Remains Neutral on Valeant (VRX) Post-Q2; Sees Longer-than-Projected Path to Recovery
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BTIG affirms Valeant Phama (NYSE: VRX) at Neutral following Q2 results from the company.
Analyst Timothy Chiang commented,
While quarterly results were mixed, the Co. maintained its full year financial targets (which include revenues of $9.9 - $10.1B and EPS of $6.60 - $7.00). While the tone of management seems to have taken a more positive turn, we are still cautious on the stock and believe the Co.’s recovery is still largely a work-in-progress.
We remain Neutral rated on VRX shares, and believe the path to a full recovery will take longer than just 6 months to execute. On one hand, we think new CEO Joe Papa may be getting his hands more around the issues that plague the Co., which could be beneficial for the shares. However, on the other hand, based on the weaker than expected 2Q results and the sizeable YOY declines seen in the Co’s dermatology and eye care Rx segments, we believe a rapid recovery in 2H16 could be an overly optimistic scenario without significant buy-in from patients with Valeant’s products.
BTIG's outlook for CY16 and CY17 EPS is $6.57 and $7.89, respectively.
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