Valeant (VRX) Product Commentary 'Concerning', Piper Jaffray Says; PT Set at $19
Piper Jaffray David Amsellem analyst reiterated an Underweight rating and reinstated a $19 price target on Valeant Pharmaceuticals (NYSE: VRX) following Q1 results.
Amsellem said he was not surprised to see a downward revision to 2016 guidance. What was more troubling in their view was the commentary surrounding the dynamics for key products/segments (particularly U.S. dermatology and Xifaxan).
"That backdrop along with management conceding that the distractions in the organization and the damage to the company's reputation have had a real impact on results lead us to wonder if there is further risk to the revised 2016 guidance," he said. "That in turn leads us to conclude that VRX still could run afoul of its financial maintenance covenants on its debt. We are reinstating a PT of $19 (see below more details) and are reiterating our Underweight rating."
The firm cut FY 2016 EPS from $8.56 to $5.98 and FY 2017 EPS from $9.70 to $5.52.
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Shares of Valeant Pharmaceuticals closed at $28.85 yesterday.