Piper Calls Valeant Management ‘Overly Rosy,’ Cuts Price Target To $10

Management of Valeant Pharmaceuticals (VRX) is taking an “overly rosy” long-term view of the business, Piper Jaffray analyst David Amsellem tells investors in a research note following the company’s Q4 results.

The analyst cuts his price target for the shares to $10 from $12 and reiterates an Underweight rating on the name. Valeant closed yesterday down 11%, or $2.11, to $16.39. Amsellem’s concern going forward is not with the 2018 guidance, but what he views as an “overly sanguine” view from Valeant of the longer-term trajectory of the business. Myriad loss of exclusivities and continued pressure on various segments like dermatology does instill confidence that 2018 will be an EBITDA trough year, the analyst contends.

Further, he believes “significant” debt maturities starting in 2020 “only worsens the picture.”