Deutsche Bank Sees 'Encouraging' Short-Term Set-Up in Valeant (VRX)
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Deutsche Bank maintained a Hold rating on Valeant Pharmaceuticals (NYSE: VRX) with a price target of $20.00 (prior $24.00). Analyst Gregg Gilbert said 2017 guidance, expected some time before or with the release of Q4 results, will be a key event, and he thinks the short-term set-up in the stock looks "encouraging."
Gilbert explained, "We expect VRX to provide its 2017 outlook sometime between now and when it reports 4Q results (date not yet set). Recall that management provided “hand signals” on its 3Q call in November that revenue and EBITDA would be down in 2017 vs. 2016. In anticipation of this event, we have updated our model to reflect recent developments and management commentary. The key elements of our changes relate to recently-announced divestitures, loss of exclusivity (LOE) for several products in 2016/17, and FX headwinds."
The analyst added, "While our rating remains Hold given various challenges, we believe the short-term set-up looks encouraging as 1) we have moved into a period of enhanced transparency from the company, 2) VRX has begun to execute on asset sales to help address the debt load, and 3) management is willing to sell core assets if the price is right."
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 $14.90 yesterday.
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