Looking Ahead of Wall Street: Valeant Pharmaceuticals Intl Inc (VRX), NVIDIA Corporation (NVDA), Snap (SNAP)

Valeant Pharmaceuticals Intl Inc

Valeant (NYSE:VRX) is due to report its earnings results for the second quarter this morning. FactSet consensus reveals that the Street is expecting $2.23 billion in revenue and $0.94 in non-GAAP EPS (down from last year’s EPS of $1.4).

This quarter saw the Canadian drugmaker take further steps to reduce its crippling debt to more manageable levels. In the past, debt for the company has reached as high as $32 billion. CEO Joseph Papa has a well-known target of reducing VRX debt by $5 billion by mid-2018-. So far it looks like the company is on track to meet this goal by narrowing its focus to key areas like the eyecare and gastrointestinal units.

Investors will be keenly checking the company’s debt progress in the quarter-which has seen the closure of the sale of Valeant’s skincare business Dendreon to China’s Sanpower for $820 million. It is expected that VRX will update its guidance for the year to reflect this sale today. The quarter has also seen Valeant make agreements to sell iNova Pharmaceuticals for $930 million and Obagi Medical Products for $190 million.

Other key figures to watch out for include sales for core brands- namely Bausch & Lomb (which should report growth of 4% plus) and Branded Rx which includes Salix Pharmaceuticals. Management has previously guided for Branded Rx sales to grow by 2% to 5% in 2017.

Moving into the print, analysts have mixed expectations of what’s in store for the stock- and it will be interesting to see whether the spectacularly disastrous Teva results last week could impact Valeant’s share post-earning share price. For example, top Mizuho Securities analyst Irina Rifkind Koffler says she is cautious because management could lower guidance, and adds that in the aftershock of Teva’s results, “even weak results may be unexpectedly well received.” She has a bearish sell rating on VRX with an $8 price target.

On the other end of the spectrum, Cantor Fitzgerald’s Lousie Chen has a buy rating on VRX with a much more optimistic $23 price target. She is encouraged by VRX’s debt reductions, and believes that investors are overly deterred by the negative news media buzz the stock generates. Chen also has high hopes for some potential blockbuster drugs on the horizon including Siliq/Brodalumab, Vyzulta, IDP-118 and Luminesse, which she says the Street is underestimating.

Overall TipRanks reveals that VRX has a Hold analyst consensus rating. In the last three months, analysts have published 3 buy, 9 hold and 3 sell ratings on the stock. We can also see that Valeant’s average analyst price target of $16.85 translates into potential upside from the current share price of 9.6%.

NVIDIA Corporation

Nvidia (NASDAQ:NVDA) is reporting its much-anticipated earnings results a couple of days later after the close on August 10. The Street is expecting EPS of $0.69 on $1.96 billion in revenue. This marks a big improvement on last year’s EPS for the same quarter of $0.44.

Nvidia is already trading at fresh highs of $172 and it is highly possible the stock will trade even higher following the earnings results. Analysts are certainly confident that the graphics chip stock has experienced a strong quarter. For example, top Merrill Lynch analyst Vivek Arya calls the stock a “top pick” ahead of the results release. He says any concerns are likely to be short-lived because NVDA has an early mover advantage in huge growth markets like AI/machine learning, gaming eSports and autonomous cars

Meanwhile five-star CB Riley analyst Craig Ellis is looking for “strong execution” in the auto, data center and gaming units. He believes that gaming has been strengthened by four new drivers including new products, e-sports momentum and crypto-currency mining. Like Arya, Ellis says it is “increasingly clear” that NVDA has the leadership position in the booming driverless car market, and adds that NVDA’s “huge CUDA [parallel computing platform] ecosystem creates a huge competitive moat in the data center.”

In his report on August 7, Ellis notes that NVDA shares exceeded his prior target, and boosts his price target from $135 to $200 (16% upside).  And Ellis has a remarkable track record on Nvidia stock specifically of 93% success rate and 94.5% average return across his 14 NVDA ratings.

In general, Nvidia has a cautiously optimistic analyst consensus rating of Moderate Buy. This breaks down into 17 buy, 8 hold and 2 sell ratings in the last three months. In terms of price, analysts are predicting that the stock has -10.8% downside from the current $172.35 share price. However, we can also see that the price targets diverge considerably- with some of the best analysts offering more bullish price targets in the $170 to $200 range.

Snap Inc

Photo messaging app Snap (NASDAQ:SNAP) is also releasing its results on August 10. The Street is modelling EPS of -$0.14 on revenue of $189.50 million. Crucially, Snap is expected to report about 176.2 million daily active users for its app, which works out at about a 10 million increase from last quarter, according to FactSet.

Since Snapchat went public at the beginning of March, share prices have dropped all the way from $24.5 all the way to $12.65 at the beginning of August. However, there is now a glimmer of hope that prices have bottomed out. Indeed, prices are up over the last few days and are now trading at $13.39. The rise came on the back of “unusual” trading activity and “massive” block buying of August calls according to CNBC.

And on August 7, SNAP received a couple of bullish analyst reports from Deutsche Bank and Drexel Hamilton. For example, top Drexel Hamilton analyst Brian White now has a buy rating on Snap and a $30 price target, which works out at a massive 124% upside from the current share price. He says that constant talk about the impact of rival Facebook on Snapchat is driving sentiment to ghastly levels, and that Snapchat actually has a “unique position with millennials.”

Furthermore, “the company continues to forge ahead with new innovations, original shows and partnerships.” The analyst highlights deals with NBC News and Time Warner as well as new features such as Voice Filters, Paperclip links and Backdrops as indicating that Snapchat has strong upside potential. White is ranked #166 out of over 4,600 analysts tracked by TipRanks.

Snap has a Hold analyst consensus rating on TipRanks, based on 31 analyst ratings in the last three months. This breaks down into 11 buy, 15 hold and 5 sell ratings. Meanwhile, with prices so low the average analyst price target now stands at over 52% upside from the current share price of $13.40.


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