Healthcare analysts dived in today on healthcare firms Valeant Pharmaceuticals Intl Inc (NYSE:VRX) and Gilead Sciences, Inc. (NASDAQ:GILD) with neutral ratings. The analysts reflect on Valeant’s agreement to amend terms with its loan holders, and Gilead’s upcoming earnings release.
Valeant Pharmaceuticals Intl Inc
Valeant shares are up nearly 2% as of this writing, after the company was granted a one-month extension from a majority of its lenders to give it more time to file its 10-K, extending the deadline to May 31 (from April 29).
BTIG analyst Tim Chiang commented, “We believe the original interest coverage covenant was to be increased to 3x after March 2016. Based on our estimates, Valeant’s total senior secured debt position is ~$13B, consisting of $11.5B in term loans and $1.45B in a drawn revolver. In addition, we estimate Valeant has ~$19.7B of unsecured debt (in the form of publicly traded corporate bonds). Our current capital structure estimates do not reflect any of the amended terms to the senior secured debt.”
“We remain Neutral on Valeant shares. Yesterday, Valeant shares rose ~19%, we think on the heels of the announcement of Pfizer and Allergan terminating their merger agreement. Valeant shares are up this morning as well. We expect the shares to remain volatile leading up to a 10k filing. In addition, we will look to see who Valeant brings in as the new CEO,” the analyst concluded.
Chiang reiterated a Neutral rating on shares of Valeant, without providing a price target.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Tim Chiang has a yearly average return of 5.1% and a 56% success rate. Chiang has a -22% average return when recommending VRX, and is ranked #834 out of 3852 analysts.Out of the 26 analysts polled by TipRanks, 8 rate Valeant stock a Buy, 13 rate the stock a Hold and 5 recommend to Sell the stock. With a return potential of 79%, the stock’s consensus target price stands at $62.94.
Gilead Sciences, Inc.
Jefferies analyst Brian Abrahams weighed in today on Gilead Sciences as the the next key milestone for the company will be its first-quarter earnings call on April 28, after market close.
Abrahams opined, “Assuming a rebound in VA purchasing and continued solid international sales, Harvoni and Sovaldi look poised to meet/beat expectations; along with our expectations for a significant Genvoya beat based on strong Rx trends and aggressive share buybacks, we believe this should more than offset some Atripla/Stribild weakness from cannibalization and enable a bottom-line beat ($3.21, vs. $3.09 consensus). We could see shares uptick on the quarter especially given the discounted multiple, though longer-term we still believe greater certainty around sustainability of HCV patient flows/pricing, pipeline prospects, and BD strategy will be needed to catalyze more meaningful stock upside.”
The analyst rates Gilead Sciences shares a Hold, with a price target of $97, which represents a slight upside potential from current levels.
According to TipRanks.com, analyst Brian Abrahams has a yearly average return of 15.9% and a 64% success rate. Abrahams has a 21.5% average return when recommending GILD, and is ranked #171 out of 3852 analysts.
Out of the 24 analysts polled by TipRanks, 19 are bullish on Gilead stock a Buy, while 5 remains sidelined. With a return potential of 25%, the stock’s consensus target price stands at $119.70.