Bausch Health Companies Inc (BHC)

[JohnCM]

Valeant: Down It Goes!

Barron's Blog
BY Dow Jones

Everything's been going so well for Valeant Pharmaceuticals International And then JPMorgan downgraded its stock.

See, Valeant has been on quite a run. Since bottoming at $8.51 in April, Valeant's shares have rallied more than 130% as the beleaguered pharmaceutical company sold off assets, and paid down or extended its debt. For the first time in a long while, it's been possible to imagine a future that includes Valeant.

JPMorgan analyst Chris Schott and team notes the improvement at Valeant, but downgraded the stock to Underweight from Neutral while arguing that its valuation is just too darn high. In fact, it now trades at 10.5 times 2018 Ebitda estimates, above the 9.5 times of the average specialty pharma company, and just about equal to Pfizer ( PFE) at 10.8, Allergan at 10.7, and Merck ( MRK) at 10.3. "We see better opportunities elsewhere in the space," Schott writes.

The downgrade has caused Valeant's stock to tumble: Its shares have slumped 10% to $19.75 at 3:45 p.m. today, while Pfizer has dipped 0.2% to $36.56, Allergan has risen 1.1% to $171.09, and Merck is off 0.5% to $56.17.

Was over 80 RSI(14)