What to Expect From Valeant Pharma Q4 Earnings

Valeant Pharmaceuticals International Inc. (NYSE: VRX) is scheduled to report its fourth-quarter preliminary results and update its 2016 financial guidance in a conference call Tuesday morning. The consensus estimates call for $2.61 in earnings per share (EPS) on $2.75 billion in revenue. The same period from the previous year had $2.58 in EPS on $2.28 billion in revenue.

This company has been a lightning rod for attention of late, with the CEO taking medical leave and then coming back, controversial dealings with Philidor and a presidential hopeful attacking over “predatory pricing.”

At this point, investors might be reaching for the parachute’s ripcord, or considering whether to buy in more, but one key analyst is taking a “Let’s see what happens” perspective, despite downgrading Valeant and slashing its price target.

Canaccord Genuity downgraded Valeant to a Hold rating from Buy, related to the growing uncertainty surrounding its multitude of investigations, both internal and external. This downgrade is also based on the firm’s decreasing reliance on the company’s fundamentals (drug pricing, strained managed care relationships, patent challenges to Xifaxan). The price target of Valeant was lowered to $75 from $125 as well, still implying some upside for the stock in 2016.
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A few other analysts also weighed in on Valeant ahead of the earnings report:

• Guggenheim reiterated a Buy rating with a $145 price target.
• Stifel reiterated a Buy rating with a $200 price target.
• Mizuho has a Neutral rating with a $122 price target.
• Jefferies reiterated a Buy rating with a $106 price target.
• BTIG reiterated a Hold rating.

So far in 2016, Valeant has vastly underperformed the broad markets, with the stock down nearly 32%. Over the past 52 weeks, the stock is actually down about 64%.

Shares of Valeant were trading at $68.23 on Monday, with a consensus analyst price target of $137.65 and a 52-week trading range of $59.87 to $263.81.