Valeant (VRX) Investors Should Be Focused on Earnings Not Upcoming Product Catalysts - Wells Fargo
While Valeant Pharmaceuticals (NYSE: VRX) continues to avoid trading on fundamentals three potential catalysts lie ahead for the company. Today, Wells Fargo bearish-leaning analyst David Maris provide his thoughts ahead of these events.
The 3 events are:
- Friday (7/15) advisory panel documents should become available ahead of next Tuesday’s (7/19) FDA advisory panel on brodalumab;
- next Tuesday (7/19) the PDUFA date for oral Relistor;
- next Thursday (7/21) is the PDUFA date for latanoprostene bunod
Maris said while these events may serve as short-term catalysts, with all three products already included in their model they believe "a much more important and potentially negative event is on the horizon: 2Q results."
The analyst notes prescription trends continue to lack the type of encouraging data needed to support a recovery of Valeant’s P+L. The analyst is also interested to hear the company's guidance of the impact of Brexit on cash flows.
"We suspect that as we write this, Valeant’s new CEO, Joe Papa, is looking over preliminary 2Q results and getting updates on 2H prospects and we suspect things do not look good," he commented. "Debt in dollars vs. sales and profits in several currencies and the strengthening dollar are all likely not good for Valeant. Additionally, prescriptions trends in the U.S. do not look encouraging."
The firm maintained an Underperform rating and valuation range of $17-$22.
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 $21.62 yesterday.