Valeant (VRX) Investigation Headlines Hurt Reputation, Financially and Sentiment - Wells Fargo's Maris

August 11, 2016 7:54 AM EDT
Get Alerts VRX Hot Sheet
Price: $21.96 -0.45%

Rating Summary:
    12 Buy, 11 Hold, 3 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 14 | Down: 11 | New: 8
Trade VRX Now!
Join SI Premium – FREE

Get access to the best calls on Wall Street with's Ratings Insider Elite. Get your Free Trial 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.

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 $27.32 yesterday.

Serious News for Serious Traders! Try Premium Free!

You May Also Be Interested In

Related Categories

Analyst Comments, Short Sales

Related Entities

Wells Fargo, David Maris

Add Your Comment