Bausch Health (BHC) Stock Set to See Big Gains, Says Analyst

Analysts and investors have all expressed their thoughts on how things will pan out for Bausch Health (BHC) when taking on Synergy’s (SGYP) IBS drug Trulance. While there are those who think the medication is as good as what its users flush down the toilet, some, like H.C. Wainwright’s Ram Selvaraju think there is a load of opportunity for BHC to develop and push it on the market. According to Selvaraju, this, paired with a November earnings report that exceeded expectations, earn the stock an upgrade. Raghuram has lifted his rating from Neutral to Buy and more than doubles the price target from $25 to $58.

“The significant shift is in keeping with our view that continued evidence of organic growth should have a substantial impact on the company’s debt-to-EBITDA ratio and thus make it a less leveraged company, while we also want to reflect the nature of some of management’s more overlooked moves. We believe, for example, that the market has underrated and underappreciated the tuck-in and complementarity-driven developments of the past several months, while these have gradually begun to position Bausch Health more strongly in several core markets,” the analyst explains.

The analyst goes on to say he believes that while Synergy missed an opportunity to capitalize on its unique drug, Trulance, BHC could just it justice: “[…] we believe that Bausch Health is likely to view Synergy’s pipeline as ripe for development and rife with possibilities—chief among these would be the potential for dolcanatide, Synergy’s second-most advanced candidate, to complement Relistor in the opioid-induced constipation (OIC) arena. The Salix group has already created an interesting one-two message with Relistor and Lucemyra; we believe that the pairing of Xifaxan with Trulance could generate an unprecedented synergistic approach to treating disorders of lower gastrointestinal (GI) tract motility,” Raghuram concluded.

Wall Street considers this stock a Moderate Buy, according to TipRanks analytics. Out of 12 analysts keeping eye on the pharmaceutical, 7 are bullish, 4 are sidelined and 1 is bearish. The consensus price target of $31.08 shows a potential upside of nearly 33%. It is yet to be seen what will happen in the bidding war, but for now it will be a game of wait-and-see. (See BHC’s price targets and analyst ratings on TipRanks)


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