As Valeant Pharmaceuticals Intl Inc. (NYSE:VRX) prepares to post financial results next week for its third-quarter and on the heels of Gilead Sciences, Inc. (NASDAQ:GILD) releasing earnings on Tuesday, analysts from Canaccord and Piper Jaffray are chiming in with varied forecasts for the biotech giants. What does Canaccord find the “most worrisome” for troubled Valeant and why is Piper Jaffray frustrated with GILD? Let’s dive in:

Valeant Pharmaceuticals Intl Inc.

Canaccord analyst Neil Maruoka is out with a preview on Valeant as the biotech giant is scheduled to report third-quarter earnings on Tuesday, November 8th. Overall, the analyst is modeling for “softness” and he therefore reiterates a Hold rating on shares of VRX with a $33 price target, which represents a 56% increase from current levels.

For the third quarter, the analyst is calling for $2.48 billion in revenue and $1.21 billion in adjusted EBITDA. Meanwhile, the troubled giant though only with a few divestitures under its belt thus far has pinpointed non-core assets circling $8 billion in value as a prospective way to cut back on debt load.

Maruoka explains, “While we had given Valeant the benefit of the doubt on its guidance following its last quarter, we continue to see weak trends for both Xifaxan and the dermatology franchise (primarily Jublia). The latter is the most worrisome for us, as it may be indicative of a slower turnaround of the company’s Walgreens partnership. Our estimates had been at the low end of the guidance range following Q2, results; however, based on our revisions going into the print, we believe that Valeant is likely to lower its full-year guidance when it reports its quarter.”

“Recent media speculation from the Wall Street Journal suggests that Valeant is in advanced talks to sell Salix for ~$8.5 billion plus royalties. While we have few details, we believe that such a transaction could see the loss of one of Valeant’s key growth drivers (Xifaxan) and would put the Salix valuation on the low end of our expected range. Nonetheless, we would view such a sale to be positive, given Valeant’s urgent need to de-lever,” Maruoka contends.

As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks, analyst Neil Maruoka is ranked #4,020 out of 4,165 analysts. Maruoka has a 13% success rate and faces a loss of 42.5% in his annual returns. When recommending VRX, Maruoka loses 38.9% in average profits on the stock.

TipRanks analytics exhibit VRX as a Hold. Based on 11 analysts polled by TipRanks in the last 3 months, 3 rate a Buy on VRX, 6 maintain a Hold, while 2 issue a Sell. The 12-month price target stands at $31.85, marking a nearly 51% upside from where the shares last closed.

Gilead Sciences, Inc.

On Tuesday, November 1st, Gilead released a third-quarter print that pleasantly surprised Piper Jaffray analyst Joshua Schimmer with “in-line” revenue that benefited from a $332 million adjustment from tenofovir alafenamide (TAF), GILD’s key pipeline drug designed to treat patients with chronic Hepatitis B infection. However, the analyst notes that a $200 million research and development (R&D) milestone payment unfortunately “wiped out the chance to beat the bottom line.”

Albeit with noted exasperation that GILD is “not making this easy” when it comes to figuring out how to divvy up resources for its pipeline amid a strain on the HCV franchise, Shimmer nonetheless maintains optimism. As the HCV franchise “continues to erode,” the analyst models for an HIV business offset.

As such, Schimmer reiterates an Overweight rating on GILD with a price target of $102, which represents just under a 41% increase from where the shares last closed.

The analyst believes, “The markets help those who help themselves, and we (and most investors) remain frustrated with the company’s inability to deliver a capital allocation strategy that resonates.”

“We can’t fault GILD for pressures on the HCV franchise and we can’t fault them for being “disciplined” with regard to M&A opportunities, but we can fault them for not having the same discipline when it comes to allocating resources to its own pipeline. But as pipeline programs fail, we expect GILD to realize it’s time to start making a different set of capital allocation choices, and believe we will see activity soon. Until then, we’ll take our 6x P/E and await earnings stabilization that can drive the multiple higher,” Schimmer concludes.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Joshua Schimmer is ranked #4,012 out of 4,165 analysts. Schimmer has a 27% success rate and faces a loss of 13% in his yearly returns. When suggesting GILD, Schimmer forfeits 6.3% in average profits on the stock.

TipRanks analytics demonstrate GILD as a Buy. Out of the 13 analysts polled by TipRanks, 9 are bullish on GILD stock, while 4 remain sidelined. With a return potential of nearly 40%, the stock’s consensus target price stands at $101.50.