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Valeant Pharmaceuticals (VRX) Price Target Raised At Canaccord, Expects Leverage Ratio To Drop From 7.1x To 6.9x Following Divestitures

January 11, 2017 7:32 AM EST
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Price: $23.40 --0%

Rating Summary:
    0 Buy, 0 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 13 | Down: 11 | New: 11
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Canaccord Genuity Hold Valeant Pharmaceuticals (NYSE: VRX) price target of $19.00 (from $17.00). Analyst Neil Maruoka says Valeant is taking the first steps to address leverage.

"Valeant has taken its first significant steps towards de-levering its balance sheet, announcing the divestiture of Dendreon and several dermatology brands (including CereVe) for combined cash consideration of ~$2.1 billion. While we view these moves to be positive, we nonetheless believe that the announcements underscore the potential challenges ahead for the company within this process. The ability to achieve higher valuations probably will require giving up higher-growth products (in this case, CereVe, which has demonstrated >20% growth over the past two years); also, potential buyers may not be able to achieve the same synergies identified by Valeant when the assets were acquired. Following these divestitures, we estimate that Valeant will have total debt of $28.3 billion remaining, representing a leverage ratio of 6.9x forward EBITDA (down from 7.1x previously)" the analyst commented.

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 $16.40 yesterday.



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