Valeant (VRX) Could Take a Large Write Down on Sprout - Wells Fargo's Maris
- Stock futures rise as flurry of deal activity boosts confidence
- AT&T (T) to Acquire Time Warner (TWX) for $107.50/Share
- Rockwell Collins (COL) to Acquire B/E Aerospace (BEAV) for $6.4B
- TD Ameritrade (AMTD) to Acquire Scottrade in $4B Cash & Stock Deal
- Oil prices fall as Iraq resists joining output cut
Get the Pulse of the Market with StreetInsider.com's Pulse Picks. Get your Free Trial 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.
Shares of Valeant Pharmaceuticals closed at $26.85 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Valeant's (VRX) Weak Business Could Force it to Refinance Debt - Wells Fargo's Maris
- Rockwell Collins (COL) volatility flat into deal with B/E Aerospace (BEAV)
- Jefferies Reiterates Buy on PPG Industries (PPG) - PT to $113
Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS View, Hot Comments, Short Sales, Trader Talk
Related EntitiesEarnings, Wells Fargo, David Maris
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!