Valeant Pharmaceuticals Intl Inc (NYSE: VRX)
Valeant Pharmaceuticals is likely to have a rough day in the market today, and for good reason. Investors are eagerly anticipating the release of earnings after the market close today. Unfortunately however, they aren’t expecting much by way of positivity. Today, we’ll talk about why investors aren’t expecting much, what we’re seeing from the stock, and what I’m expecting to see from earnings and VRX ahead.
VRX Investors Aren’t Expecting Much From Earnings
As mentioned above, Valeant Pharmaceuticals is expected to release its earnings today after the closing bell. While investors are eagerly anticipating the release, they are concerned with regard to what they can expect to see. These concerns all stem back to what we saw late last year.
Late last year, it was uncovered that VRX was using a relationship with a pharmacy known as Philidor to pad the numbers and make things look better than they actually were. When they got caught, the term Philidor Scandal was dubbed and the stock took a dive.
Since then, VRX has been struggling in a big way. As a result of the scandal, the company was forced to cut ties with Philidor. Unfortunately for the company and its investors, Philidor just so happened to be the company’s largest customer. Since the cutting of the ties, the company has created new relationships, but continues to struggle to bring sales back to what they once were.
As a result of everything mentioned above, investors are expecting that sales for the quarter will be weak and profit will be minimal.
What We’re Seeing From The Stock
In after hours trading, Valeant Pharmaceuticals wasn’t doing very well. Unfortunately, the declines are continuing into the trading hours. Currently (9:35), VRX is trading at $22.18 per share after a loss of $0.02 per share or 0.09%.
What I’m Expecting To See
When it comes to earnings, I have a relatively bullish opinion with regard to what we can expect to see from Valeant Pharmaceuticals later on this afternoon. While I do understand that the company has been struggling since the Philidor Scandal, I don’t believe that VRX is being given the credit it deserves with regard to the changes it has made since the scandal. All in all, I’m expecting for sales to beat projections, leading to stronger than expected revenue and earnings.
When it comes to what I’m expecting to see from VRX ahead, my opinion remains overwhelmingly bullish. While there are risks involved in legal implications of the scandal, the cost of those risks wont be seen for at least 2 years. So, the company has plenty of time to prepare for the inevitable. However, considering the changes that the company made, the pipeline of products in development and the impressive list of products the company has on the market, I believe that VRX is highly under valued. With that said, I’m expecting to see gains ahead.
What Do You Think?
Where do you think VRX is headed moving forward? Join the discussion in the comments below!