Ladenburg Sees 35% Upside for Transenterix Inc (TRXC), RBC Gets More Cautious on Valeant Pharmaceuticals Intl Inc (VRX)

Healthcare analysts take different approaches to valuing Transenterix and Valeant.


Ladenburg Boosts Transenterix Price Target on FDA Win

It’s been a crazy week for Transenterix Inc (NYSEAMERICAN:TRXC) investors. TRXC hit a record high of $5.00 on Tuesday, after announcing FDA approval for the company’s Senhance Surgical System. The Senhance is approved for gynecological and colorectal procedures of which there are 23 that account for approximately 1.5 million procedures in the US annually. However, the stock gave up its gains subsequently to trade around $3.30 (as of this writing).

Ladenburg analyst Jeffrey Cohen believes there’s still about 35% upside for TRXC share price. As such, the analyst boosts his price target to $4.50 (from $3.00), while reiterating a Buy rating on stock. (To watch Cohen’s track record, click here)

Cohen commented, “While the capital sales cycle for surgical related equipment has historically proven to take numerous quarters, we believe that Senhance’s positioning and attractive recurring economics could offer accelerated adoption both among established Da Vinci accounts looking to expand their technological platforms and practices toward laparoscopy (colorectal, gynecology, others) as well as more mid- and smaller-sized institutions wanting to continue to further innovate.”

“We are making modifications to our model which are primarily focused on Senhance’s US clearance and confidence surrounding placements in the medium and long term. For 2018, 2019 and 2020 our total platform placement estimates are being increased from 6, 10 and 15 to 10, 23 and 36, respectively,” the analyst added.

This volatile biotech stock certainly has the Street divided. Based on 4 analysts polled by TipRanks in the last 12 months, 2 rate a Buy on Transenterix stock, while 2 remain neutral. The 12-month average price target stands at 2.98, marking a nearly 9% downside from where the stock is currently trading.TRXC analyst ratings chart

RBC Cuts Price Target on Valeant Pharmaceuticals Ahead of Earnings

The earnings report from Valeant Pharmaceuticals Intl Inc (NYSE:VRX) is nearly three weeks away. Ahead of this event on November 7, RBC Capital analyst Douglas Miehm cuts his price target to $18.00 (from $21.00), while reiterating a Sector Perform rating on the stock. (To watch Miehm’s track record, click here)

Miehm explained, “VRX generally provides guidance for the year ahead when it reports Q4 results. However, we note that management could “rebase the outlook” as it could provide a better understanding of 2017 divestitures, LOEs, and launch delays (Vyzulta). We see 2018 consensus estimates as too high ($8.5B revenue and $3.3B adj. EBITDA) and believe they will likely decline over the next quarter or two.”

“We anticipate Q3/17 revenues of $2.14B vs. consensus of $2.17B. Our revenue forecasts account for potential currency tailwinds in the quarter. Our forecasts call for $1.29B in B&L/International, $587MM in Branded Rx (Includes GI of $423MM and Derm of $130MM), and $264MM in U.S. Diversified. We continue to expect Xifaxan price growth to moderate in H2/17, although management intends to grow its price in 2018+ as it did in the first half of this year,” the analyst added.

Miehm is not alone in playing it safe on the drug maker, as TipRanks analytics exhibit VRX as a Hold. Out of 12 analysts polled in the last 3 months, 3 are bullish on Valeant stock, 6 remain sidelined, and 3 are bearish on the stock. However, with a potential upside of nearly 57%, the stock’s consensus target price stands at $19.30.VRX analyst ratings chart

 

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