Bausch Health (BHC) saw its shares crater by as much as 10% today on exceptionally high volume. This drop was triggered by the release of the company’s fourth-quarter results, which has shown another year-over-year revenue decline.
At first glance, Bausch Health’s numbers look great. The company reported $2.12 billion and $858 million adj. EBITDA, beating the Street expectations of $2.08 billion and $824.2 million, respectively. However, falling revenue and losses when there were positive earnings in the prior-year period might make you think the company is headed in the wrong direction. Specifically, the company plunged to a net loss of $344 million or 98 cents a share after reporting net income of $513 million or $1.45 a share, in the year-earlier.
Cantor analyst Louise Chen commented, “We think a greater appreciation for BHC’s solid execution and future growth prospects should drive upwards earnings revisions as well as multiple expansion in 2019+.” As such, Chen reiterates a Buy rating on BHC stock, with a price target of $32.00, which implies about 33% upside from current levels. (To watch Chen’s track record, click here)
Mizuho’s Irina Rivkind Koffler added, “This strong finish to 2018 creates a challenging comp for 2019, but we believe visibility into 2019 growth can evolve over the course of the year […] We believe guidance includes upside from recently acquired products like Trulance, and is generally in line with the prior guide of Y/Y revenue growth. Bausch is still awaiting FDA approval of psoriasis drug Duobrii, which we expect to be a positive catalyst to shares […] We reiterate our Buy rating, which is predicated on continued execution against guidance targets and emerging visibility into longer term growth.” With a price target of $39, Koffler sees over 60% upside in BHC. (To watch Koffler’s track record, click here)
All in all, Chen and Koffler are certainly not the only analysts with an optimistic outlook for this pharmaceutical player, as TipRanks analytics showcasing BHC stock as a Buy. With an average price target of $33.14, analysts are predicting an upside of nearly 38%. In total, the stock has received 6 ‘buy’ ratings vs. just 1 ‘sell’ rating in the last three months. (See BHC’s price targets and analyst ratings on TipRanks)