Valeant (VRX) PT Cut to $40 at Canaccord Genuity
Canaccord Genuity analyst Neil Maruok reiterated a Hold rating and lowered his price target on Valeant Pharmaceuticals (NYSE: VRX) to $40.00 (from $75.00).
Maruok commented, "guidance was even lower than our base-case scenario and we believe has begun to erode investor confidence in Valeant’s underlying business. We believe that the implementation of the partnership with Walgreens, coupled with new managed care contracts and inventory destocking, have all contributed to the much lower outlook for next year. Much of the pain will be felt in Q1, as Valeant’s EBITDA guidance currently sits at ~$6.0 billion for the last three quarters of 2016 and the first quarter of 2017. Nonetheless, this remains well below the $6.9 billion to $7.1 billion 2016 EBITDA guidance provided as recently as December of last year. In light of this outlook, we are lowering our 2016 adjusted EBITDA forecast to $5.6 billion (from $6.9 billion) and adjusted EPS to $9.89 (from $13.57)."
He added, "The weak guidance was likely the last straw for many investors, underscoring the numerous risks that we had highlighted in our recent downgrade. Further, the threat of default on Valeant’s debt raises additional questions about what is behind the delayed 10-K filing. Although there may be value in Valeant’s business, until larger concerns are addressed, we expect the stock will continue to trade at a substantial discount to peers."
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 $33.51 yesterday.