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BHC and Teva: How Tax Rate, Interest Expenses, and Capex Stack Up

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Comparing the tax rate

In its fourth-quarter earnings investor presentation, Bausch Health Companies (BHC) has guided for a non-GAAP adjusted tax rate of 10% for fiscal 2019. Wall Street analysts have projected Bausch Health Companies’ effective tax rate to be 10.59%, 11.03%, and 11.34%, for fiscal 2019, fiscal 2020, and fiscal 2021, respectively.

According to the fourth-quarter earnings investor presentation, Teva Pharmaceutical (TEVA) expects a tax rate of 16% in fiscal 2019. Wall Street analysts have projected Teva Pharmaceutical’s effective tax rate to be 16.14%, 16.21%, and 16.25% for fiscal 2019, fiscal 2020, and fiscal 2021, respectively.

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Interest expense projections

In its fourth-quarter earnings investor presentation, Bausch Health Companies has guided for an interest expense of $1.60 billion for fiscal 2019 excluding the impact of any potential M&A transactions.

Wall Street analysts have projected Bausch Health Companies’ interest expenses to be $1.62 billion, $1.59 billion, and $1.48 billion for fiscal 2019, fiscal 2020, and fiscal 2021, respectively, which implies a YoY change of -3.75%, -1.78%, and -6.77% for fiscal 2019, fiscal 2020, and fiscal 2021, respectively.

Wall Street analysts have projected Teva Pharmaceutical’s interest expenses to be $826.19 million, $778.89 million, and $728.38 million for fiscal 2019, fiscal 2020, and fiscal 2021, respectively, which implies a YoY change of -7.48%, -5.73%, and -6.48% for fiscal 2019, fiscal 2020, and fiscal 2021, respectively.

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Capex projections

In its fourth-quarter earnings investor presentation, Bausch Health Companies has guided for capital expenditures of $275 million and restructuring and other expenses of $50 million for fiscal 2019.

Wall Street analysts have projected Bausch Health Companies’ capital expenditures to be $232.90 million, $212.78 million, and $200.24 million for fiscal 2019, fiscal 2020, and fiscal 2021, respectively, which implies a YoY change of 48.34%, -8.64%, and -5.90% for fiscal 2019, fiscal 2020, and fiscal 2021, respectively.

In its fourth-quarter earnings investor presentation, Teva Pharmaceutical has guided for capital expenditures of $600 million for fiscal 2019, almost similar to expenditures reported in fiscal 2018.

Wall Street analysts have projected Teva Pharmaceutical’s capital expenditures to be $659.73 million, $626.90 million, and $601.87 million, for fiscal 2019, fiscal 2020, and fiscal 2021, respectively, which implies a YoY change of 1.34%, -4.98%, and -3.99% for fiscal 2019, fiscal 2020, and fiscal 2021, respectively.

Next, we will discuss growth drivers for Bausch Health Companies in greater detail.

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