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On Monday, Raymond (NSE:RYMD) James adjusted its outlook on Bausch Health Companies (NYSE:BHC), lowering the price target from $9.00 to $8.00 while keeping a Market Perform rating on the stock. Currently trading at $5.03, InvestingPro analysis suggests the stock is undervalued, with analyst targets ranging from $5.00 to $10.00. The firm’s analysts pointed to a mixed first quarter for the company, noting strong revenue and adjusted EBITDA in most segments, with the exception of Bausch + Lomb/International, which faced pharmaceutical challenges and Latin American market weakness.
Bausch Health’s overall performance, excluding Bausch + Lomb/International, was bolstered by its Salix and Solta segments. The company’s strong performance is reflected in its impressive 70.8% gross profit margin and 8.5% year-over-year revenue growth to $9.73 billion. Salix exceeded the firm’s expectations by 3%, with its key product Xifaxan growing 8% year-over-year, attributed to increases in both price and volume. Solta also performed well, with a 13% positive surprise against projections and a remarkable 28% year-over-year growth driven by significant market expansions in South Korea and China.
The company has recently taken steps to improve its financial position. In early second quarter, Bausch Health completed approximately $7.9 billion in debt refinancing, which allowed it to pay off a substantial amount of its near-term, high-interest debt. This strategic move is expected to provide the company with greater financial flexibility as it prepares for the loss of exclusivity of Xifaxan in 2028. InvestingPro data shows the company maintains a healthy current ratio of 1.35, though it carries significant leverage with total debt of $21.5 billion. Get access to detailed financial health analysis and 6 additional ProTips with an InvestingPro subscription.
Despite these positive developments, Bausch Health has revised its full-year 2025 guidance. While the company increased its revenue guidance by $50 million, it decreased its adjusted EBITDA forecast by $50 million. These adjustments primarily reflect the evolving situation with Bausch + Lomb/International, including foreign exchange impacts and an intraocular lens recall.
Following these updates and the revised company guidance, Raymond James has recalibrated its expectations for Bausch Health, resulting in a reduced price target. The firm maintains its Market Perform rating, suggesting a neutral stance on the stock’s potential performance.
In other recent news, Bausch Health Companies Inc. has made several notable announcements. The company reported a favorable court ruling that maintains its market exclusivity for XIFAXAN® until at least June 2028, following a lawsuit involving its gastroenterology business, Salix Pharmaceuticals, Inc. This decision is significant as it alleviates concerns about potential generic competition impacting Bausch Health’s revenue from this key product. Additionally, Bausch Health has disclosed that activist investor Carl Icahn has acquired an economic interest covering approximately 34% of the company’s outstanding shares through equity swaps. This development was part of a proxy statement supplement filed ahead of the company’s annual general meeting. Furthermore, Health Canada has approved Bausch Health’s Thermage® FLX, a non-invasive skin tightening device, marking a strategic expansion in the aesthetic sector. At the American Society for Laser Medicine & Surgery 2025 Annual Conference, Bausch Health also launched Fraxel FTX™, a new skin resurfacing laser technology. These developments reflect Bausch Health’s ongoing efforts to strengthen its market position across various sectors.
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