Analysts Shine Light On Two Falling Healthcare Giants: Celgene Corporation (CELG), Valeant Pharmaceuticals Intl Inc (VRX)

Analysts are weighing in on the Biopharmaceutical giant Celgene Corporation (NASDAQ:CELG) and controversial drug giant Valeant Pharmaceuticals Intl Inc (NYSE:VRX), as shares of both companies fell sharply today.

Celgene Corporation

Celgene shares tumbled more than 5% today after the company reported third-quarter revenues of $2,33M, below consensus of $2,38M due to weak Revlimid and Abraxane demand, but reported non GAAP earnings of $1.23, slightly ahead of consensus of $1.21.

Subsequently, J.P. Morgan analyst Cory Kasimov reiterated an Overweight rating on Celgene, with a price target of $152, which implies an upside of 26% from current levels.

Kasimov noted, “CELG reported mixed 3Q results, with a slight top-line miss coupled with a bottom-line beat. The most notable performance, in our view, is the Otezla beat of $139M vs. cons of $114M. Additionally, Abraxane came in below cons ($230M vs. $269M), and we will look out for commentary on market dynamics in both breast and lung cancer from mgmt. CELG reiterated 2015 guidance for net product sales and non-GAAP EPS, increased expectations for Revlimid and lowered guidance for Abraxane.”

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Cory Kasimov has a total average return of 4.8% and a 58.1% success rate. Kasimov has a 9.3% average return when recommending CELG, and is ranked #668 out of 3824 analysts.

Out of the 18 analysts polled by TipRanks, 16 rate Celgene Corporation stock a Buy, while 2 rate the stock a Hold. With a return potential of 28%, the stock’s consensus target price stands at $153.82.

Valeant Pharmaceuticals Intl Inc

In a research note issued today, Mizuho Securities analyst Irina Rivkind Koffler reiterated a Buy rating on shares of Valeant Pharmaceuticals, with a $155 price target, as the company’s stock price continues to slide amid allegations of accounting fraud and government investigation into the company’s drug pricing.

Koffler observed, “We try to remain rational and reiterate our BUY rating. We understand the panic associated with the turnover of large shareholders, potential government investigations, and the threat of management replacement. That said, our DCF analysis of the business under catastrophic scenarios (using estimates below our official numbers) generates a per-share value of $100.”

Furthermore, “The company still has significant optionality, in our view. Valeant’s emerging markets business generated EBIT margins below 15% in 1H:15 and is a divestable unit, in our view. We estimate 2016 sales of $2.1B which includes contribution from recently acquired Amoun. If Valeant divests this entire segment for a 2.5-3.5x sales multiple (in line with other deals in the sector), then we could see an influx of $5.3-7.4B into the company, which could be used to rapidly de-lever the business.”

The analyst concluded, “The stock is no longer trading on fundamentals in our view. We look at a liquidation valuation in the extreme case that management is ousted and the business is put up for sale under distressed conditions. We conclude shares are undervalued and reiterate our BUY rating.”

According to, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Irina Rivkind Koffler has a total average return of 45.6% and a 68.1% success rate. Koffler has a 30.3% average return when recommending VRX, and is ranked #3 out of 3824 analysts.

Out of the 19 analysts polled by TipRanks, 13 rate Valeant Pharmaceuticals stock a Buy, 5 rate the stock a Hold and 1 recommends a Sell. With a return potential of 158%, the stock’s consensus target price stands at $200.12.




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