Valeant (VRX) Could Take a Large Write Down on Sprout - Wells Fargo's Maris

September 23, 2016 6:50 AM EDT
Get Alerts VRX Hot Sheet
Price: $14.73 --0%

Rating Summary:
    10 Buy, 12 Hold, 4 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 7 | Down: 8 | New: 1
Trade VRX Now!
Join SI Premium – FREE

News and research before you hear about it on CNBC and others. Claim your 2-week free trial to StreetInsider Premium here.

Wells Fargo analyst David Maris sees Valeant Pharmaceuticals (NYSE: VRX) taking a large impairment charge on the carrying value of Sprout.

The charge could be as much 90% of its value, or more, Maris said, and without the addback to adjusted earnings going forward, this write-off would be a $0.14 per share headwind to annual adjusted EPS in 2017E and beyond.

"We believe there may be other assets that face this same problem, compounding Valeant’s divestiture plans, as Valeant would lose not only the cash flow from the products, but the addback to adjusted EPS of potentially overstated intangible asset amortization," he added.

The firm maintained their Underperform rating and $17-$22 valuation range.

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 $26.85 yesterday.

Serious News for Serious Traders! Try Premium Free!

You May Also Be Interested In

Related Categories

Analyst Comments, Analyst EPS View, Hot Comments, Short Sales, Trader Talk

Related Entities

Earnings, Wells Fargo, David Maris

Add Your Comment