Valeant (VRX) PT Bumped to $22 at Piper Jaffray; Keeps Lowest Rating
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Piper Jaffray analyst David Amsellem bumped his price target on Valeant Pharmaceuticals (NYSE: VRX) to $22.00 (from $19.00) but maintained an Underweight rating following results and reaffirmed guidance, which the analyst said may be overly optimistic.
Amsellem commented, "Valeant reported 2Q16 non-GAAP diluted EPS of $1.40 on revenue of $2.42B, lighter than Street estimates. Management reiterated its 2016 guidance, which in our view may be overly optimistic. As such, we would not yet conclude that VRX is out of the woods with its creditors and certainly would not conclude that it is positioned for growth in the next 2-3 years at a minimum. Further, though VRX is looking for takers on assets that comprise over $2B in revenue and notably believes these divestitures could have an aggregate transaction value of around $8B, it is hard for us not to wonder if management and the Board is taking an overly sanguine view here (on what basis should we give VRX the benefit of the doubt?). We reiterate our Underweight rating and are raising our PT to $22 from $19, reflecting adjustments to our estimates."
The firm bumped FY 2016 EPS from $5.98 to $6.37 and FY 2017 EPS from $5.52 to $6.01.
Shares of Valeant Pharmaceuticals closed at $28.16 yesterday.
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