Bausch Health stock target cut to $8.50 by RBC Capital

Published 07/04/2025, 18:00
Bausch Health stock target cut to $8.50 by RBC Capital

On Monday, RBC Capital Markets adjusted its financial outlook on Bausch Health Companies Inc. (NYSE:BHC), lowering the price target to $8.50 from the previous $9.00. Despite the adjustment, the firm maintained a Sector Perform rating on the healthcare company's shares. According to InvestingPro data, the stock has seen a significant decline of about 18% in the past week, with analyst targets ranging from $7 to $12. The revision comes as Bausch Health prepares to release its first-quarter financial results for 2025 after the market closes on April 30. As a prominent player in the Pharmaceuticals industry, the company has maintained a robust gross profit margin of 71.1% and generated revenue of $9.6 billion in the last twelve months. For deeper insights into BHC's financial health and valuation metrics, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 US stocks.

Analysts at RBC Capital, including Doug Miehm, are anticipating Bausch Health's Q1/25 revenue to be around $2.24 billion, which is slightly below the consensus estimate of $2.29 billion. The firm also forecasts adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) to be approximately $720 million, not accounting for the $19 million minority interest associated with the BLCO holding, compared to the consensus estimate of $767 million. InvestingPro analysis shows the company achieved EBITDA of $3.13 billion in the last twelve months, with analysts expecting improved profitability this year.

The report from RBC Capital also notes that the company recently announced a significant debt refinancing, with 52.5% of BLCO equity being pledged. Analysts are looking forward to management's commentary on their strategy for unlocking the value of the BLCO equity stake, which is approximately 88%. This commentary is expected to be provided when the company reports its quarterly results. InvestingPro data indicates the company maintains a total debt to total capital ratio of 0.88, highlighting the significance of this refinancing move.

Additionally, Bausch Health's gastrointestinal drug Xifaxan is under the spotlight, with ongoing litigation and the potential impact of newly announced tariffs. RBC Capital is seeking updated commentary from the company on these matters.

Bausch Health's Q1/25 earnings announcement is scheduled to coincide with the first-quarter results of BLCO, which will be released before the market opens on the same day, April 30. The company's performance, management's strategic plans, and updates on key products such as Xifaxan will be closely monitored by investors and analysts alike.

In other recent news, Bausch Health Companies Inc. announced the pricing of an upsized $4.4 billion senior secured notes offering, set to close in April 2025, with proceeds aimed at repaying existing credit agreements and redeeming senior secured notes due between 2025 and 2028. This refinancing strategy, including the issuance of $4 billion in new senior secured notes and securing $3.4 billion under a new term loan facility, is part of the company's broader effort to manage its debt. S&P Global Ratings has upgraded Bausch Health's issuer credit rating to 'B-' from 'CCC+', reflecting the company's refinancing of $6.87 billion in debt due from 2025 to 2028, which alleviates near-term refinancing risks. Despite the upgrade, the outlook remains negative due to potential challenges such as an earlier-than-expected generic launch for Xifaxan and significant Medicare price reductions in 2027. Raymond (NSE:RYMD) James analyst Michael Freeman maintained a Market Perform rating for Bausch Health, noting the company's strategic efforts to pay down high-interest debt, which could enhance financial flexibility and facilitate the separation of its subsidiary, Bausch + Lomb Corporation. The company's recent strong operating performance, marked by seven consecutive quarters of revenue growth, supports these developments. However, the potential sale of Bausch + Lomb, halted in February 2025, remains a critical factor in the company's financial strategy.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.