Harriet Lefton

About the Author Harriet Lefton

Harriet originates from the UK where she worked as a journalist specializing in the metal markets. She graduated from the University of Cambridge before becoming a qualified UK lawyer.

Valeant Pharmaceuticals Intl Inc (VRX) Pays Off Further Debt, Apple Inc. (AAPL) iPhone 8 Delay Rumors Swirl

Valeant Pharmaceuticals Intl Inc (NYSE:VRX) shares slightly rose in Thursday’s trading session, after the drug maker announced that it is redeeming approx. $500 million of Senior Notes using cash in hand on August 15 2017.

Valeant is today issuing a notice of redemption for the 6.75% Notes that had been due for payment in 2018. The company already paid back $1.1 billion of the principal amount of $1.6 billion in March this year. Now, once the remaining Notes are redeemed, Valeant will have slashed its debt by over $4.8 billion since Q2 2016. And crucially, looking forward, Valeant will now have no significant debt maturities and no mandatory amortization requirements through 2019.

Joseph C. Papa, Valeant CEO, made reducing Valeant’s huge $30 billion debt pile one of his primary objectives when he took the head position at VRX back in early 2016. He told investors that he wanted Valeant to cut its debt by $5 billion through divestures and free cash flow within 18 months.

And now by clearing the Notes, issued in 2013, the Canadian company is well on track to meet this goal. Indeed, Papa today gave further reassurance to his investors, saying: “We are confident we will not only meet, but also exceed our debt reduction commitment early.”

Valeant has a Hold analyst consensus rating. In the last three months, the stock has received 3 buy, 9 hold and 3 sell ratings. Meanwhile the average analyst price target of $17.91 now stands at a 5.41% upside from the current share price. Interestingly, the price targets diverge significantly from $35 (106% upside) on the high to just $8 (-52% downside) on the low.

Apple Inc (NASDAQ:AAPL) has been hit by fresh rumors in respect of its upcoming iPhone 8. Except this time the rumors aren’t a new design leak, but a report from Bank of America suggesting that the new iPhone may be delayed by up to one month. Normally new iPhone releases are launched in September- and this is the date that the market is expecting.

Analysts from Bank of America, including Wamsi Mohan, traveled to the iPhone’s production factory in Asia. Following the trip, the analysts reported that their conversations with ‘the Supply Chain’ made it seem like the iPhone 8 will ship 3-4 weeks late because of technological issues. In particular, finger printing and 3D sensors were both named as responsible for the holdup which could mean that the phone is not launched until October.

As a result, Wamsi Mohan slashed his predicted iPhone September quarter shipments by 11 million, and also reduced his December quarter by 6 million. This means that for fiscal year 2017, Mohan is now working with an estimated 208.1 million shipping (down by 11 million). However, on the flip side, Mohan raised his iPhone shipment estimates by 10 million for the March quarter of next year.

Other analysts from different firms including RBC Capital Markets, Cowen, KGI and Drexel Hamilton, have also expressed concerns that the iPhone 8 could experience delays of around one month. Meanwhile Fast Company has reported that Apple is ‘feverishly’ trying to fix software bugs plaguing the new phone’s 3D sensor and wireless charging capability.

Mohan has a buy rating on Apple with a $180 price target which translates into a 22% upside from the current share price. He is ranked #1,354 out of 4,600 analysts tracked by TipRanks with a strong track record on Apple stock specifically.

With anticipation of the new iPhone launch driving analysts wild, it is not surprising that Apple has the Street’s seal of approval. The stock has received an impressive 24 buy ratings and 7 hold ratings in the last three of months. We can also see that analysts are predicting average upside of 12% from the current share price for the next 12 months.