BHC - Embedded Expectations Analysis - 2020 09 01
Bausch Health Companies Inc. (BHC:USA) currently trades well below corporate averages relative to UAFRS-based (Uniform) earnings, with a 9.2x Uniform P/E, implying bearish expectations for the firm. However, given management's confidence about their eye health business, script recovery, and ProBalance Technology, market expectations are overly bearish and equity outperformance is warrantedSpecifically, management is confident about their decision to spin-off their eye health business as an independent publicly traded company and that investors will favor the eye health business as a stand-alone company. They are also confident that script declines have reversed trends as of June 2020. In addition, they are confident that the infused ProBalance Technology helps maintain ocular homeostasis and reduces the symptom of contact lens-induced dryness, and that their franchises are positioned to recover when the coronavirus impact subsides
Valeant Pharmaceuticals International is a pharmaceutical and medical device company that develops, manufactures, and markets a range of branded, generic and branded generic pharmaceuticals, over-the-counter (OTC) products, and medical devices (contact lenses, intraocular lenses, ophthalmic surgical equipment, and aesthetics devices). Co. has two operating and reportable segments: Developed Markets, which focuses in dermatology, neurology, gastrointestinal disorders, and eye health therapeutic; and Emerging Markets, which focuses primarily on branded generics, OTC products, and medical devices.
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