Risk Of Debt Restructuring at Valeant (VRX) is Increasing; PT Range to $10-$13 - Wells Fargo's Maris

November 15, 2016 7:41 AM EST
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Wells Fargo analyst David Maris said the risk of restructuring at Valeant Pharmaceuticals (NYSE: VRX) is increasing following disappointing results and outlook.

The firm is lowering 2016 adjusted EPS estimate from $6.64 to $5.76 and 2017 adjusted EPS estimate from $7.56 to $5.41 and their valuation range from $17-$22 to $10-$13.

"Following the guidance reset and commentary on 2017, we are less certain Valeant has the ability to meet its obligations without refinancing, and we think following 3Q results, a refinancing would be much more expensive," Maris said. "We estimate first lien secured debt rates perhaps 200bps higher than a week earlier and that the unsecured market may currently be unavailable."

The firm maintained an Underperform rating.

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 $17.55 yesterday.

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