Cantor analyst Louise Chen was out pounding the table on shares of Valeant Pharmaceuticals Intl Inc (NYSE:VRX) Friday, reiterating an Overweight rating and price target of of $23, which represents a potential upside of 72% from where the stock is currently trading. (To watch Chen’s track record, click here)
Chen wrote, “We received calls today regarding concerns about VRX’s financial controls. This is likely causing the weakness in the shares today. VRX is down 4% intraday and the S&P500 is up 0.21%. After speaking with the company, we believe that the concerns are likely just noise and cannot be strung together into an argument that VRX has issues with financial controls. Therefore, we don’t see fundamental reasons for VRX’s weakness today.”
“We think Valeant is on track to meet its three-year plan. This year, the company is focused on stabilization, which we think Valeant has already achieved. 73% of Valeant’s business is growing at 8% (constant currency). Year two is about paying down debt. We believe that Valeant can lower its debt to 4x-5x EBITDA over the next several years. The company is already ahead of its debt pay-down objectives. Finally, year three is about new, organic product launches. We think Valeant has already started this with Siliq, Relistor, Luminess and Vyzulta,” the analyst continued.
As far as the troubled biotech giant’s verdict on the Street, it is a toss-up among analysts, as TipRanks analytics exhibit VRX as a Hold. Out of 13 analysts polled in the last 3 months, 3 are bullish on Valeant stock, 7 remain sidelined, and 3 are bearish on the stock. With a return potential of nearly 40%, the stock’s consensus target price stands at $18.73.
Valeant Pharmaceuticals engages in the development, manufacture, and market of a broad range of pharmaceutical products in the areas of dermatology, gastrointestinal disorders, eye health, neurology and branded generics. It operates through the following segments: The Bausch + Lomb/International, The Branded Rx, and The U.S. Diversified products.