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On Friday, Wells Fargo (NYSE:WFC) analysts downgraded Bausch & Lomb Corporation (NYSE:BLCO) stock from Overweight to Equal Weight and reduced their price target from $24.00 to $15.00. The downgrade was attributed to uncertainties surrounding the enVista intraocular lens product recall and the overall impact and timeline for resolution, which analysts believe will constrain the stock’s performance in the near term.
The analysts noted that while Bausch & Lomb has seen improving financial performance and a successful launch of the Miebo product, concerns about the enVista recall add to existing uncertainties. These include issues related to the ownership and separation of Bausch Health Companies (NYSE:BHC) Inc., which they see as ongoing overhangs on the stock’s value.
Bausch & Lomb’s stock has been under scrutiny due to the recall of enVista, a key product in their portfolio. The recall has limited visibility on the impact it will have and the timeline for resolving the issues, leading to a more cautious stance from Wells Fargo.
The analysts acknowledged the company’s recent positive developments, such as the strong performance of the Miebo launch, which had previously helped to shift investor sentiment towards a more fundamental analysis of the company. However, the current concerns appear to outweigh these positives at this time.
Wells Fargo’s revised price target of $15.00 reflects a significant decrease from the previous target of $24.00, indicating a more conservative outlook for Bausch & Lomb’s stock performance. The analysts concluded that given the compounded uncertainties, they are opting to adopt a more neutral perspective on the company’s shares.
In other recent news, Bausch + Lomb Corp. announced a voluntary recall of certain intraocular lenses from its enVista platform due to complications potentially linked to toxic anterior segment syndrome. This recall is part of the company’s proactive measures to ensure patient safety. Meanwhile, S&P Global Ratings upgraded Bausch + Lomb’s credit rating from ’B-’ to ’B’, reflecting a stronger stand-alone credit profile compared to its parent company, Bausch Health. Analysts have also been adjusting their price targets for Bausch + Lomb. Morgan Stanley (NYSE:MS) lowered its target from $19 to $18, maintaining an Equalweight rating, while H.C. Wainwright revised its target from $23 to $20, keeping a Buy rating. BofA Securities further reduced its target to $17 from $18, maintaining an Underperform rating due to concerns over the company’s 2025 guidance and its separation from Bausch Health. Bausch + Lomb’s fourth-quarter revenue of $1,280 million exceeded forecasts, showing a 9% year-over-year increase. However, the net loss for 2024 was $317 million, with an adjusted net income of $204 million. The company projects 2025 revenue between $4,950 million and $5,050 million, with anticipated foreign exchange headwinds.
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