Not to mention they are burning thru their cash. No way I hell can they ever pay off their $30 Billion in debt
Nomura Securities downgraded Valeant Pharmaceuticals from Buy to Neutral with a price target of $60.00 (from $175.00), saying they have lost conviction in the company and management credibility needs rebuilding.
Analyst Shibani Malhotra commented, "We are downgrading Valeant shares to Neutral from Buy and reducing our DCF-based target price to $60 from $175 following a far more significant reduction in 2016 guidance than we had anticipated. We admit upfront, we have been humbled by our stock call on VRX, which we have defended despite the continuing spate of bad news, as we believed that despite the noise surrounding the company, much of the fundamental businesses had been performing well. Despite the fact that our new PT for $60 represents 79.1% potential upside, we do not expect VRX shares to outperform the market near term, as we have lost confidence in management’s ability to understand its own business and to provide reliable guidance. We no longer have the required conviction to rate VRX a Buy and are thus moving to the sidelines. A few key reasons:
Management has lost almost all credibility with us and investors, as reflected in the 51.5% reduction in the stock price today (versus -0.2% for the S&P 500).
The company clearly does not have a handle on its business performance given the steep reduction in guidance over merely three months. This disappointing guidance today has forced us to revisit our view on certain key businesses that are becoming more difficult to analyze given increasingly challenging healthcare and payer dynamics.
There is a lack of visibility into potentially binary events such as the filing of the company’s 10-K and the conclusions from final Ad Hoc committee review results.
She added, "We recognize that while VRX no longer seems to trades on fundamentals, there are sources of potential upside such as approvals for new products, including Oral Relistor, Latanoprostene-Bunod and Brodlaumab. Additionally, a clear review from
Analysts at CIBC downgrade VRX to sell reduce pt from $90 to $30
Think again! Copy & past this from another poster. They are in real trouble
There are two breaches. The credit facility is breached today (March 15). They have until April 29 to cure. The bondholder breach is March 31 and they have 60 days from that to cure it. To cure all they need to do is file a 10K. One stupid little SEC report, right? Well not so fast -- 10K needs to be certified!!
The company is focusing on the bank (credit facility) breach. This tells me that they are unsure if they will get a 10K filed by April 29. So they want to get the banks to give them more time. I think the banks are likely to extend VRX some time because they do not want the mess of a default -- they just want to get paid back and are happy to keep lending money if the company is healthy.
Bond holders are a different story. With the bonds at 75 cents (today), they likely would grant an extension because they want to bonds back at 90 but if the bonds were trading at 30 cents, they would want the company to default so they could liquidate and get their 100 cents back.
The problem is this:
There are accounting irregularities and the CPA/auditors are refusing to sign off on their unaudited financials. This means their financials are clearly BS. Auditors have been fined many millions so they are not going to robosign anything.
It is very likely that they are working hard to get financials certified by April 29 but they cannot promise VRX they will. The auditors dont like to be in this position since they have a duty to VRX to perform on their audit (but then they have a duty to provide a very accurate accounting). So I think VRX likely will get their 10K filed in time but it will be ugly. VRX has been burning cash like a madman. The problem is people think "ok, let's just sell assets and get things paid off". It doesn't work like that. The company goes to BK.
S&P Capital reduce their price target from $90 to $30.
VRX downgraded to "sector underperform", target reduced to $24
After such a drastic price decline, one might think VRX is a bargain. Not even close. Those purchasing Valeant now would be buying a highly overvalued stock with a long history of misleading accounting. These are not exactly the characteristics of a quality investment.
In order to justify its current price of $36/share, the company would need to grow NOPAT by 15% compounded annually for the next 8 years. In this scenario, Valeant would be generating $29 billion in revenue, greater than AstraZeneca's (NYSE:AZN) 2015 revenue.
Even in an ideal scenario, in which Valeant focuses on internal growth and not destructive acquisitions, VRX still has significant downside. If Valeant can grow NOPAT by 9% compounded annually for the next decade, the stock is worth $23/share today - a 36% downside.
Type messageHas The House Of Cards Finally Collapsed?
As early as June 2014, we pointed out Valeant was presenting itself in a misleading way. Ultimately, the company was relying on non-GAAP metrics to present its cash flow as highly positive, when in fact, the true cash flows of the business have been highly negative. This contrast between cash flow calculations is a topic of much debate between bears and bulls of Valeant and really gets at the heart of why non-GAAP metrics continually fail investors when analyzing a company. Analysis using Valeant's reported "Cash Earnings" weren't getting a true picture of the company, as can be seen in Figure 1.
The company's non-GAAP "cash earnings" have grown from $421 million in 2010 to $3.55 billion over the latest trailing-twelve months (TTM). In reality, free cash flow has been highly negative with a cumulative -$38.4 billion in losses over the same time frame. Cumulative non-GAAP earnings during the same time are $11.2 billion.
Non-GAAP Doesn't Pay Down Debt
As seen above Valeant's true cash flow is not only much lower than Valeant would have investors believe, it is also largely negative. While management can prop up shares by touting non-GAAP results, those results don't help pay debt covenants because the true cash flow is not available. Debt covenants may soon become just another issue in the already long list if Valeant defaults on its bond indentures. We already know Valeant has raised significant capital, as its debt has increased from $372 million in 2009 to $30 billion over the last twelve months. Without a sale of assets, one has to wonder how well Valeant can service such debt because it won't be happening with non-GAAP "cash earnings."
Warning Signs Were All Around
The warning signs at Valeant have long been in clear view, if you looked past the positive analyst sentiment, excellent non-GAAP results, and management rhetoric.
1.In June 2014, we noted that Valeant was presenting its business in a misleadin
Ackman's lost more than $666 million on paper on his Valeant position since Monday's close. His losses to date on his Valeant investment are estimated at north of $2 billion.
The banks would be able to accelerate the loans under the credit agreement as a result of this default-- Same with $SUNE (overdue)
Valeant Pharma (VRX) Won't File 10-K Within 15-Day Extension Period
First Quarter 2016 Guidance Update
•Total Revenue expected to be $2.3 - $2.4 billion from previous guidance of $2.8 - $3.1 billion
•Adjusted EPS (non-GAAP) expected to be $1.30 - $1.55 from previous guidance of $2.35 - $2.55
Yep, they sure will they are burning thru $14 million a qt with only $24 million on hand. Look for at least 10 million shares added to the float.
GW Pharma (GWPH) PT Raised to $130 at Leerink Partners
You had a stop loss set at $88. nice try idiot! You must be a Hillary Clinton supporter, she lies like a dog too!
Dicks Sporting Goods Inc (NYSE:DKS) was downgraded by analysts at Vetr from a “buy” rating to a “sell” rating in a research report issued to clients and investors on Tuesday, MarketBeat.com reports. They presently have a $42.50 price objective on the sporting goods retailer’s stock. Vetr‘s price target indicates a potential downside of 4.62% from the stock’s current price.
Several hedge funds recently bought and sold shares of the stock. Beacon Capital Management bought a new stake in Dicks Sporting Goods during the fourth quarter valued at $0. Alpha Windward boosted its stake in Dicks Sporting Goods by 29.2% in the fourth quarter. Alpha Windward now owns 11,160 shares of the sporting goods retailer’s stock valued at $395,000 after buying an additional 2,520 shares during the period. Denali Advisors bought a new stake in Dicks Sporting Goods during the fourth quarter valued at $424,000. First Midwest Bank Trust Division boosted its stake in Dicks Sporting Goods by 14.7% in the fourth quarter. First Midwest Bank Trust Division now owns 13,534 shares of the sporting goods retailer’s stock valued at $478,000 after buying an additional 1,730 shares during the period. Finally, Hills Bank & Trust Company bought a new stake in Dicks Sporting Goods during the fourth quarter valued at $551,000.
UBS reiterated a Buy rating on Dick's Sporting Goods, and raised the price target to $51.00 (from $42.00), following the company's 4Q earnings report. While the 4Q results that featured a -2.5% comp and a $0.02 EPS miss vs. cons did little to inspire, this was largely anticipated given the uncooperative weather. However, UBS calculates that there are 68 Dick's stores within 5 miles of a Sports Authority store that is closing, and 93 stores within 10 miles of a closing location. In a base case, it is assumed that the closing stores may account for $4.1 mm in sales per location.
Analyst Michael Lasser commented, "There were several important points from DKS' 4Q release. Notably, the stock rallied & finished up 0.5% as the market wants to lift the story out of the “challenged bucket” of retailers into healthier territory. While the 4Q results that featured a -2.5% comp and a $0.02 EPS miss vs. cons did little to inspire, this was largely anticipated given the uncooperative weather. Having this “bad news” out of the way should lift some of the uncertainty. Plus, it sounds like the biz is on better footing, with 0%-1% comp guidance for 1Q. Trends should improve over '16 as comparisons ease & investment initiatives kick in. This should provide a solid base for the shares to move higher, particularly considering they trade at an attractive 13.1x our CY’17 EPS estimate."