Valeant Pharmaceuticals (VRX) Looking Past Allergan - BMO Capital

BMO Capital analyst Alex Arfaei reiterated an Outperform rating and $176 price target on Valeant Pharmaceuticals (NYSE: VRX) after Actavis entered in a definitive agreement to buy Allergan in deal valued at $219 per share.

Arfaei notes, as reflected by the flat to modestly positive performance of VRX stock this morning, the market’s expectations for a deal with AGN was low following all the leaks regarding a potential ACT/AGN deal.

Beyond the deal, the analyst expects strong operational performance from Valeant in the near term.. In its press release this morning, Valeant stated that it expects a strong 4Q14 and that it has a "robust outlook for 2015," he highlighted.

On other M&A, Arfaei said we are more likely to see friendly, private deals from Valeant in the near future. "Although we have repeatedly discussed Zoetis (ZTS, $43.14, Outperform) as a plausible Plan-B, we doubt we will see a hostile attempt from Valeant," he said. "Other potential deals include buying private consumer healthcare companies in emerging markets and established products from large pharma companies."

Lastly, the analyst said the most important silver lining from this saga is that Valeant withstood the additional intense scrutiny from Allergan's numerous allegations about the sustainability of its business.

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 $134.21 yesterday.

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