Valeant (VRX) Investigation Headlines Hurt Reputation, Financially and Sentiment - Wells Fargo's Maris
- Top 10 News for 12/2: Crude Rips on OPEC Cut; Starbucks' Schultz Steps Down; Nonfarm Payrolls Flat in Nov.
- Unemployment Rate Drops to 4.6%
- Bond yields slip on U.S. jobs data, euro steady before Italy vote
- Alibaba (BABA) Founder Jack Ma Discuss Plans to Retire; 'I Don't Want to Die at the Office'
- Starbucks Coffee (SBUX) CEO Howard Schultz to Step Down, Appointed Executive Chairman; Kevin Johnson New CEO
Get instant alerts when news breaks on your stocks. Claim your 2-week free trial to StreetInsider Premium here.
Wells Fargo's David Maris weighed in on Valeant Pharmaceuticals (NYSE: VRX) following reports after the close Wednesday that under criminal investigation related to its past non-disclosed relationship with Philidor.
Maris notes that since the launched coverage on the stock, they've stated that investigations by state attorney generals, the IRS, the SEC and others are a significant risk factor, as is the ongoing insider trading suit.
"The risks not only include reputational harm, but include potential financial damages and fines, and also potential commercial sanctions or restrictions," he notes. "Additionally, these investigations can also have an impact on the shares from a sentiment standpoint, as some investors may choose not to own shares where there is news flow and allegations of fraud or other impropriety as these funds often hear from their investors about their holdings."
Maris said while it is not possible to know how the investigation will turn out or if charges will be pursued, they believe that with Valeant having such high debt, the impact of financial or commercial penalties is high.
The firm maintained an Underperform rating and $17-$22 valuation range on VRX.
Shares of Valeant Pharmaceuticals closed at $27.32 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Caterpillar (CAT) Offers FY17 Guidance Update at Credit Suisse Conference
- xG Technology (XGTI) Files $22.9M Units Shelf
- Valeant Pharma (VRX) Talks to Sell Salix to Takeda for $10B Have Broken Down - DJ
Create E-mail Alert Related CategoriesAnalyst Comments, Short Sales
Related EntitiesWells 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!