Michael Pearson may still be considered by some because the best person to run Valeant Pharmaceuticals International Inc. moving forward, but that doesn’t mean the proportion price has room to operate higher in the near future.
Investors and analysts expect Valeant will lower its 2016 revenue guidance if this holds a rescheduled conference call on March 15.
However, the pharma giant continues to have a relatively attractive portfolio which includes IBS drug Xifaxan, fungus treatment Jublia, consumer and contact lens assets, as well as several older resilient brands.
As an effect, Mizuho analyst Irina Koffler thinks Valeant will be able to achieve single digit organic growth in 2017.
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She also noted that Valeant were built with a strong presence in the American Academy of Dermatology’s annual meeting, with no concerns concerning the company’s psoriasis treatment, Brodalumab, were heard.
“We’re comfortably that revenues are sufficiently durable to support a sale of the business if required,” Koffler said inside a research note.
However, the analyst doesn’t expect Valeant’s partnership with Walgreens will be sufficient to revitalize sales. In the long term, she anticipates revenues will decline without the advantage of M&A activity and progress using the product pipeline.
Koffler lowered her price target around the stock to US$70 from US$112.
“Pearson certainly is the right person with this job,” the analyst said, predicting that many from the scary disclosures have likely already hit.
While filing its 10-K with the SEC could provide more stability for Valeant shares, Koffler sees little room for upside given the company’s high leverage, weak growth prospects, and limited options when it comes to acquisitions and divestitures.
