Has Valeant Finally Become More Trustworthy?

Valeant Pharmaceuticals International Inc. (NYSE: VRX) is hoping to find its pulse sometime soon, before it’s too late, and right now it seems that the company is trying everything just to stop the bleeding. So far in 2016, the stock is down 40%, which is not exactly par for the course, but the numbers get worse if we look at it over the past 52 weeks — the stock is down 70%.

In Monday’s trading session, it seems that investors are finally coming around and trusting this company.

What steps is Valeant taking to save itself and earn this trust? Originally the company was scheduled to report its fourth-quarter financial results on February 29, but with CEO J. Michael Pearson back at the helm after his two-month extended sick leave, he made the push for the company to report its fourth-quarter preliminary results in mid-March.

Now 24/7 Wall St. has commented in the past on the state of Valeant’s leadership, and we concluded that Pearson is one chief executive that has to go. Although he has just returned to his company from sick leave, in his absence the stock was absolutely battered, and shareholders should be rightfully frustrated.
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In terms of the reaction the market has had for this company, short interest for Valeant skyrocketed at this point and has pushed new highs recently. The highest reading, in late January, had short interest at 13.00 million with 2.3 days to cover.

Here’s what we can expect from these preliminary results, according to Thomson Reuters. The consensus estimates call for $2.61 in earnings per share (EPS) on $2.75 billion in revenue. In the same period of last year, the company had EPS of $2.58 and revenue of $2.28 billion.

In a recent release from the company, Pearson commented about releasing the preliminary financial results:

We are looking forward to providing Valeant shareholders with an update on the company’s progress. February 29th was my first day back to work following a two month medical absence. Now that I have returned, I have been working diligently to review the business so that I can share our latest performance and outlook with shareholders.

Shares of Valeant were trading up over 8% at $66.41 Monday morning, with a consensus analyst price target of $142.25 and a 52-week trading range of $59.87 to $263.81.