Valeant Shows Signs of the Stabilization
Valeant Pharmaceuticals Intl Inc (NYSE:VRX) investors are finally waking up from their nightmare, as the stock rockets 20% in Wednesday’s trading session. The reason? The drug maker reported its first quarterly profit in a year and a half and increased its 2017 adjusted EBITDA guidance to a range of $3.60 billion to $3.75 billion (from $3.55 billion to $3.70 billion, previously), driven primarily by a reduced impact from generic competition so far this year.
Canaccord analyst Neil Maruoka believes the company has begun to show signs of the stabilization of its business. For the quarter, revenue of $2.1 billion was in line with the analyst’s estimate of $2.1 billion and the Street at $2.2 billion. Adjusted EBITDA of $861 million was almost exactly in line with the analyst’s forecast of $875 million and the Street at $861 million. First quarter adjusted EPS of $0.78 was also in line with Maruoka’s estimate of $0.79.
“Despite our expectations of lower guidance over the course of the year as the company completes the divestiture of assets, Valeant actually increased its 2017 adjusted EBITDA guidance following Q1. With much of the recent weakness in the stock due to the fallout from Pershing Square’s exit, we believe that investors are regaining confidence based on the stability in the quarter,” Maruoka wrote.
Maruoka reiterates a Hold rating on Valeant, with a price target of $12.00, which represents a slight upside potential from current levels.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Neil Maruoka has a yearly average return of -1.1% and a 40.5% success rate. Maruoka has a -29.8% average return when recommending VRX, and is ranked #3694 out of 4567 analysts.
Out of the 14 analysts polled by TipRanks (in the past 3 months), 2 rate Valeant stock a Buy, 9 rate the stock a Hold and 3 recommend to Sell. With a return potential of 21%, the stock’s consensus target price stands at $14.50.
Kite Pharma Dives on Clinical Setback
Kite Pharma Inc (NASDAQ:KITE) saw its shares diving nearly 19% in the past two days, following an unexpected finding of a fatal, grade 5 case, resulting in death from cerebral edema in its ZUMA-1 expansion study.
H.C. Wainwright analyst Corey Davis commented, “We view this as an event that Kite will need to convince regulators is indeed unlikely to occur again based on observed adverse event rates thus far, but do not anticipate this having an unexpected impact on the BLA filing and path to approval by the end of this year.”
As such, Davis reiterates a Buy rating on KITE shares with an $85 price target, which implies an upside of 26% from current levels.
According to TipRanks, analyst Corey Davis has a yearly average return of -0.4% and a 41% success rate. Davis has a 19.4% average return when recommending KITE, and is ranked #3393 out of 4567 analysts.
Out of the 17 analysts polled by TipRanks (in the past 3 months), 10 are bullish on Kite Pharma stock, 6 remain sidelined, and only one is bearish on the stock. With a potential return of 24%, the stock’s consensus target price stands at $85.58.