Valeant (VRX) Miss and Guide Down Expected, But Magnitude Maybe Not - Mizuho
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Mizuho Securities analyst Irina Koffler weighed in on Valeant Pharmaceuticals (NYSE: VRX) after the 3Q:16 miss and lowered guide, which were widely expected but perhaps the magnitude was not.
Koffler commented, "Valeant reported $2.48B in revenues and non-GAAP EPS of $1.55 vs. $2.51B and $1.75 StreetAccount consensus and our estimates $2.44B and $1.63. As was widely expected. Valeant's new CFO cut FY:16 guidance to $9.55-$9.65B in revenues and EPS of $5.30-$5.50 from previous ranges $9.9-$10.1B and $6.60-$7.00. Adjusted EBITDA is now estimated to be $4.25-4.80B. Investors were looking for a whisper guidance range ahead of the quarter but we think the new one may be worse than expected. We were modeling $9.76B and $6.15 for FY:16 so our 4Q:16 estimates appear too high relative to guidance and we note consensus estimates are even higher. With this announcement we think that credibility of the new management team has been impaired, and hopes of a quick business turnaround should be discarded. We will revisit our recommendation and PT after the call."
The firm maintained a Neutral rating and price target of $25 on VRX.
Shares of Valeant Pharmaceuticals closed at $19.13 yesterday.
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