Shares of Valeant Pharmaceuticals surged more than 2% higher on Wednesday morning, touching a new 52-week high in the process. The embattled pharma stock continues to polarize investors, but its recent recovery is starting to gain momentum. As we approach the New Year, it is time to ask: is Valeant officially back?
Shares are still a long way from their highs of mid-2015, but the stock has climbed about 90% since the beginning of November. Valeant’s run comes as investors gear up for the company to begin sales of its new glaucoma treatment, Vyzulta, which should start this month.
Valeant Pharmaceuticals International, Inc. Price and Consensus
Valeant Pharmaceuticals International, Inc. Price and Consensus | Valeant Pharmaceuticals International, Inc. Quote
According to analysts surveyed by Bloomberg, Vyzulta is projected to generate about $174 million of revenue by 2021, while the company’s new ocular redness treatment, Luminesse, is expected to bring in about $38 million that year.
On top of Vyzulta and Luminesse, Valeant should benefit from sales of other new drugs, such as Siliq, a psoriasis medication, and IDP-118, a topical lotion that is currently being reviewed by the Food and Drug Administration.
Valeant has languished near $14 per share for most of the year. At those levels, new drug approvals attracted the attention of value investors, including Dimensional Fund Advisors LP, which more than tripled its stake in the pharma firm during the third quarter.
But Wall Street analysts remain lukewarm on both the stock and the company’s near-term prospects. The average analyst price target for VRX still sits at just $17, and earnings estimates for the upcoming fiscal year are not looking great.
Based on our latest consensus estimates, we expect Valeant to report full-year earnings of $3.59 per share in 2018. That figure would represent a 7% slump from this year’s projected full-year profits, which are expected to be down about 30%.
Valeant is finally starting to rebound, but investors should not expect volatility to disappear. However, the stock could be attractive to buy-and-hold investors looking to cash in on the company’s new drugs somewhere down the line.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
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Valeant (VRX) Touches 52-Week High: Is the Stock Officially Back?
Shares of Valeant Pharmaceuticals surged more than 2% higher on Wednesday morning, touching a new 52-week high in the process. The embattled pharma stock continues to polarize investors, but its recent recovery is starting to gain momentum. As we approach the New Year, it is time to ask: is Valeant officially back?
Shares are still a long way from their highs of mid-2015, but the stock has climbed about 90% since the beginning of November. Valeant’s run comes as investors gear up for the company to begin sales of its new glaucoma treatment, Vyzulta, which should start this month.
Valeant Pharmaceuticals International, Inc. Price and Consensus
Valeant Pharmaceuticals International, Inc. Price and Consensus | Valeant Pharmaceuticals International, Inc. Quote
According to analysts surveyed by Bloomberg, Vyzulta is projected to generate about $174 million of revenue by 2021, while the company’s new ocular redness treatment, Luminesse, is expected to bring in about $38 million that year.
On top of Vyzulta and Luminesse, Valeant should benefit from sales of other new drugs, such as Siliq, a psoriasis medication, and IDP-118, a topical lotion that is currently being reviewed by the Food and Drug Administration.
Valeant has languished near $14 per share for most of the year. At those levels, new drug approvals attracted the attention of value investors, including Dimensional Fund Advisors LP, which more than tripled its stake in the pharma firm during the third quarter.
But Wall Street analysts remain lukewarm on both the stock and the company’s near-term prospects. The average analyst price target for VRX still sits at just $17, and earnings estimates for the upcoming fiscal year are not looking great.
Based on our latest consensus estimates, we expect Valeant to report full-year earnings of $3.59 per share in 2018. That figure would represent a 7% slump from this year’s projected full-year profits, which are expected to be down about 30%.
Valeant is finally starting to rebound, but investors should not expect volatility to disappear. However, the stock could be attractive to buy-and-hold investors looking to cash in on the company’s new drugs somewhere down the line.
Want more stock market analysis from this author? Make sure to follow @Ryan_McQueeney on Twitter!
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research. It's not the one you think.
See This Ticker Free >>