Valeant (VRX) 'Conservative Base Case' Suggests 109% Upside - Nomura
Nomura Securities analyst Shibani Malhotra lowered her price target on Valeant Pharmaceuticals (NYSE: VRX) to $175.00 (from $220.00) but reiterated a Buy rating as her "Conservative Base Case" suggest 109% upside to current levels.
While the call did not address all our outstanding questions; however, management's willingness to be as open as possible in its responses was a positive first step towards rebuilding credibility with investors, according to Malhotra.
"ur base-case scenario takes a more conservative stance than management’s expectation that most of the operational pressure on these two (relatively small) segments will be seen in 4Q15 as we account for some longer-term reputational impact as well as potential employee attrition due to potential impacts to morale. However, we highlight that that the rest of Valeant’s businesses continue to show robust growth, which should generate solid cash flows in 2016 and beyond. Our new target price is $175, which represents 109.1% upside to current levels."
The firm expects further details on the company’s business outlook for 2016 during its planned investor day in December
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Shares of Valeant Pharmaceuticals closed at $83.68 yesterday.