Healthcare analysts from Rodman and Renshow and Oppenheimer chimed in on Valeant Pharmaceuticals Intl Inc (NYSE:VRX) and Incyte Corporation (NASDAQ:INCY), providing insights on recent updates and upcoming earnings, respectively. Both analysts predict long term success for the two companies but lower their estimates due to financial changes for Valeant and increased expenses for Incy.

Valeant Pharmaceuticals Intl Inc

Analyst Ram Selvaraju of Rodman and Renshow commented on Valeant after the firm issued its 10-K form. While the analyst acknowledges the disclosure of several investigations from various states, the most important point in the 10-K is the reduction of 2015 revenue from $10.5 billion to $10.4 billion and Q4:15 revenue decreasing from $2.79 billion to $2.76 billion as well as Q4 EPS reduction to $1.55 from $2.50. As a result the analyst lowers his 2016 2017 EPS estimates from $8.15 to $7.68 and from $11.30 to $10.80, respectively.

Although the analyst is uncertain regarding near term growth for the company, he believes they will start to take steps in the right direction. He states “We see no direct indication that the company would not be able to comply with its debt covenants going forward, and we remain confident that the firm can negotiate a turnaround over the course of the coming months.”

The analyst also comments on recent management changes, noting that the company nominated a few new directors. Among them is Amy Weschler, M.D., a board certified dermatologist. The analyst notes her nomination as part of the company’s efforts to “revitalize its flagging skin care businesses.” Overall, though, the analyst is unimpressed with the new candidates. He states, “We do not view any of these individuals as game-changers in their own right.

Renshaw believes the company’s operating margins are in near term danger, crediting price reductions as part of its deal with Walgreens as well as Congressional commitments to manage rising prices and reduce the costs of its most expensive drugs. However, the analyst remains hopeful. He explains, “Nevertheless, we do not believe that Valeant’s core franchises are about to undergo significant decline.” He notes high demand for various Valeant products and specifically highlights a lack of competition for Xifaxan. He continues, “We believe that our moderated expectations and the original revenue guidance provided by the firm in March 2016 can be met.”

The analyst reiterates a Buy rating on the stock and reduces his price target from $105 to $102.

According to TipRanks, out of all the analysts who have rated the company in the past 3 months, 33% gave a Buy rating, 19% gave a Sell rating, and 48% remain on the sidelines. The average 12-month price target for the stock is $47.43, marking a 29% upside from where shares last closed.

Incyte Corporation

Oppenheimer analyst Christopher Marai commented on what he expects for INCY’s 1Q earnings report on May 9. Most notably, the analyst is adjusting his revenue and EPS estimates for Jakafi, a PV drug developed with Novartis, to $180 million and $0.28, respectively, down from previous estimates of $191 million and $0.35, respectively. The analyst credits “seasonality in ordering patterns, impact of unrealized loss from Agenus deal, and Novartis’ 1Q16 results” for his estimate change. He later added a $35 million payment to Eli lily for rights to drug ruxolitinib as a factor for his estimate change.

Marai also provides commentary on several other factors he expects updates on in the earnings call. First, the company should provide some updates on its ECHO program which investigates Epacadostat, the company’s IDO1 inhibitor, pointing to an increased dose. The phase 3 study of the program should begin at “any day” to evaluate epacadostat and pembralizumb to treat advanced melanoma. The analyst states, “We expect data to demonstrate efficacy similar to CTLA-4/PD-1 combinations and improved safety.”

The analyst also points Baricitinib launch in 2017 as a catalyst for shares, believing its potential is currently “underappreciated.” He explains, “Disruption in the RA market likely a positive for Baricitinib, as increasing generic/biosimilar competition may result in renewed interest by physicians/patients to explore alternate treatment option.” He also notes that Baricitinib is safer than anti-TNFs or other JAKs.

The analysts reiterates an outperform rating on the stock with a $108 price target. He states, “We continue to view INCY shares as undervalued, with growing commercial ruxolitinib program and upcoming royalties (2017) from baricitinib. Epacadostat updates in 2H16 to provide clarity for IDO program. Earlier pipeline a source of upside, despite derisked targets and clear strategy in combinability.”

According to TipRanks, Christopher Marai has a 49% success rate recommending stocks with an 8.6% average return per recommendation. Out of the 9 analyst who have rated the company in the last 3 months, all gave a Buy rating. The average 12-month price target for the stock is $87.67, marking a 26% upside from where shares last closed.