A name change and a stock upgrade to ‘Overweight’ at Barclays, and a $0.28 earnings beat are all giving this turnaround stock a boost.
Bausch Health Companies Inc. (BHC), formerly Valeant Pharmaceuticals (VRX)
From The Turnaround Letter
Bausch Health Companies Inc.’s (BHC), formerly Valeant Pharmaceuticals (VRX) former business model of acquiring drug companies, slashing their R&D expenses and aggressively raising their product prices led to an 18x increase in its stock price from 2010 to 2015. But when this problematic strategy collapsed under a $26 billion mountain of debt, intense public scrutiny and heightened pricing pressure, the shares dropped 95% to their old 2010 price.
Today, led by new CEO Joseph Papa, Valeant is working to rebuild itself around its valuable Bausch & Lomb eye care and Salix gastrointestinal treatment businesses. The company is slowly chipping away at its sizeable debt and legal burdens. The most recent quarter provided a degree of optimism as revenues and EBITDA showed improvement and management raised their full-year guidance.
To further separate itself from its tainted legacy, the company is being renamed “Bausch Health Company” (BHC). Nancy’s note: name change was effective July 16, 2018.
George Putnam III, The Turnaround Letter, www.turnaroundletter.com, 617-573-9550, July 2018