Piper Jaffray Sees Significantly More Downside Risk, Versus Upside Potential to Valeant's (VRX) 2016 Guidance

Piper Jaffray analyst David Amsellem reiterated an Underweight rating on Valeant Pharmaceuticals (NYSE: VRX) after a closer look at 2016 guidance. The firm's conclusion is that there is significantly more downside risk to 2016 guidance than upside potential.

Amsellem commented, "We took a closer look at a number of Valeant’s U.S. segments with the goal of sizing up the extent to which management’s 2016 guidance (expected 2016 EBITDA of $5.6B-$5.8B) is realistic. There are obviously quite a lot of moving parts and certain items that are not yet quantifiable (e.g., the extent to which VRX’s damaged relationships with customers will impact volumes). Nonetheless, after looking at historical pricing for over 90 U.S. products, and doing a detailed dive into prescription (Rx) volume trends across the U.S. business (see below for more details), our conclusion is that there is significantly more downside risk to 2016 guidance than upside potential. We reiterate our Underweight rating and our PT remains suspended in the absence of audited financials."

For an analyst ratings summary and ratings history on Valeant Pharmaceuticals click here. For more ratings news on Valeant Pharmaceuticals click here.

Shares of Valeant Pharmaceuticals closed at $33.67 yesterday.

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