Risk Of Debt Restructuring at Valeant (VRX) is Increasing; PT Range to $10-$13 - Wells Fargo's Maris
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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.
Shares of Valeant Pharmaceuticals closed at $17.55 yesterday.
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