Valeant Pharma (VRX): Was Cautious, Investigation Doesn't Help - Mizuho

November 1, 2016 6:10 AM EDT
Get Alerts VRX Hot Sheet
Price: $14.73 -1.14%

Rating Summary:
    10 Buy, 12 Hold, 4 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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Mizuho Securities analyst, Irina Koffler, reiterated her Neutral rating on shares of Valeant Pharmaceuticals (NYSE: VRX) after the stock sold off on news of an ongoing (not new) criminal investigation.

The analyst was cautious heading into the 3Q:16 earnings report because she expects management to cut 2016 guidance and the longer term outlook. However, the outlook is not dire.

Following the Aug 23 amendment, VRX must maintain an interest coverage ratio of 2:1, down from 3:1 previously. Based on updated estimates of $1.66B in interest expense in FY:16, the analyst believes VRX needs to generate FY:16 EBITDA of $3.32B. This is considerably below guidance of $4.8-$4.95B.

No change to the price target of $25.

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 $17.84 yesterday.

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