What to Look for When Valeant Pharmaceuticals Intl Inc (VRX) Reports Earnings


Valeant Pharmaceuticals Intl Inc (NYSE:VRX) is set to release its fourth-quarter financial results before the markets open on Tuesday, February 28. Consensus estimates call for $1.21 in earnings per share (EPS) on $2.34 billion in revenue.

Barclays analyst Douglas Tsao stated, “After the successful sale of CeraVe and Dendreon, comments at an investment conference at the beginning of the year have created significant concern around the impact of LOEs. With 3Q, management set an expectation that EBITDA in 2017 would be lower than 2016, though the magnitude remains to be seen. EBITDA expectations will be the area of most focus considering VRX needs to maintain a 2.0x interest coverage ratio as per the most recent credit amendment. Investors will be looking for reassurance that non-core asset sales will generate enough capital to be B/S accretive and for continued growth in the base business, including key dermatology, ophthalmology and gastrointestinal franchises.”

Tsao rates VRX a Hold with a price target of $34, which represents a potential upside of 133% from where the stock is currently trading.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Douglas Tsao has a yearly average return of 9.3% and a 58% success rate. Tsao has a -73.3% average return when recommending VRX, and is ranked #615 out of 4374 analysts.

Out of the 22 analysts polled in the past 12 months, 5 rate Valeant Pharmaceuticals International stock a Buy, 13 rate the stock a Hold and 4 recommend to Sell. With a return potential of 95%, the stock’s consensus target price stands at $28.55.