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Valeant Pharmaceuticals: The Expectations for 4Q15 Earnings

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Share price estimates for Valeant

According to NASDAQ, Valeant Pharmaceuticals International (VRX) could report fiscal 4Q15 and fiscal 2015 earnings on February 22, 2016. The company hasn’t reported anything about its upcoming earnings release yet, so an algorithm based on historical release dates was used to estimate the release date.

Valeant Pharmaceuticals, headquartered in Laval, Quebec, Canada, is a specialty pharmaceutical and medical device company. It’s engaged in developing, manufacturing, and marketing of branded as well as generic drugs coupled with over-the-counter drugs. The company focuses on dermatology, eye health, gastrointestinal, neurology, and consumer healthcare products. Medical devices include contact lenses, intraocular lenses, ophthalmic surgical instruments, and aesthetic devices.

The above table covers 20 brokerage firms and their estimated target prices for Valeant Pharmaceuticals. The consensus 12-month target price for the company is $152.10 with a horizon of 12 months. This translates to a ~66.2% return compared to Valeant’s closing price of $91.50 on February 2, 2016.

According to a Bloomberg consensus of 24 brokerage firms recorded on February 1, 2016, 62.5% of the firms rated Valeant Pharmaceuticals stock a “buy,” while 33.3% rated it a “hold” and 4.2% rated it a “sell.”

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Expectations from Valeant for 2015

Valeant Pharmaceuticals has lowered its revenue and EBITDA (earnings before interest, taxes, depreciation, and amortization) guidance for 2015. According to the revised guidance, revenue for 2015 would be $10.4–$10.5 billion, and adjusted EPS (earnings per share) would be $10.23–$10.33. For more details on lowered guidance, please refer to Why Valeant Pharmaceuticals Lowered Its Guidance for 4Q15.

The table above details the latest 2015 guidance compared to actual figures for 2014. During the fourth quarter of 2015, Valeant is expected to report adjusted non-GAAP (generally accepted accounting principles) EPS of $2.55–$2.65.

Peers Pfizer (PFE), Merck (MRK), and Eli Lilly (LLY) are expected to earn adjusted EPS of $0.52, $0.90, and $0.79, respectively, in 4Q15.

To diversify the risk of investing directly in the equity of Valeant Pharmaceuticals, investors can look for options such as the VanEck Vectors Pharmaceutical ETF (PPH). PPH holds 4.1% of its total holdings in Valeant Pharmaceuticals stock.

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