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Why Is Bausch (BHC) Down 9.8% Since Last Earnings Report?

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A month has gone by since the last earnings report for Bausch Health (BHC - Free Report) . Shares have lost about 9.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Bausch due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Bausch Beats on Q3 Earnings & Sales

Bausch Health Companies Inc. reported better-than-expected results for the third-quarter results. The company’s adjusted earnings per share of $1.15 beat the Zacks Consensus Estimate of $0.87 and was up from $1.04 per share reported in the year-ago quarter.

Total revenues of $2.14 billion also topped the Zacks Consensus Estimate of $2.087 but declined 4% from the year-ago quarter.

Quarter in Detail

Revenues in the Bausch + Lomb / International segment were $1.1 billion, down 7% year over year primarily due to divestitures and discontinuations. Excluding the impact of discontinuation of divestitures, primarily the skin care divestiture, and foreign exchange, the Bausch + Lomb/International segment organically improved by approximately 3%.

Salix segment revenues came in at $460 million up 2% despite generic competition following the loss of exclusivity for Uceris.  Growth in the segment was driven by higher sales of Xifaxan and Relistor, which grew 88% year over year.

Ortho Dermatologics segment posted revenues were $177 million, flat year over year. Revenues in the Global Solta business grew by 15% organically driven by demand and the launch of the Thermage FLX System in additional markets around the world.

Diversified Products segment revenues were $352 million down 1% from the year-ago quarter primarily due to the impact of the 2017 divestitures and discontinuations.

2018 Guidance Reiterated

The company expects total revenues in the range of $8.15-$8.35 billion.
 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 5% due to these changes.

VGM Scores

At this time, Bausch has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Bausch has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.




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