On Monday, April 7, 2025, RBC Capital Markets made a notable adjustment to its financial outlook for Bausch Health Companies Inc. (NYSE:BHC), lowering the price target to $8.50 from the previous $9.00. Despite this revision, the firm maintained a Sector Perform rating on the healthcare company’s shares, reflecting a cautious optimism about its future performance.
Over the past week, Bausch Health's stock has experienced a significant decline, plummeting approximately 18%. Current analyst targets for the stock vary widely, ranging from $7 to $12, indicating differing perspectives on its potential recovery. This adjustment from RBC comes as Bausch Health prepares to announce its first-quarter financial results for 2025, which is scheduled for April 30, after the market closes.
As a prominent player in the Pharmaceuticals industry, Bausch Health has managed to sustain a robust gross profit margin of 71.1% while generating revenue of $9.6 billion over the past twelve months. Analysts at RBC Capital, including Doug Miehm, predict that the company’s Q1/25 revenue will be around $2.24 billion, slightly below the consensus estimate of $2.29 billion. Furthermore, the firm 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.
According to InvestingPro analysis, Bausch Health achieved an impressive EBITDA of $3.13 billion in the last twelve months, with analysts anticipating improved profitability in the coming year. RBC Capital’s report also highlights a significant debt refinancing initiative undertaken by the company, with 52.5% of BLCO equity being pledged. This move is critical as analysts look forward to management's commentary on their strategy for unlocking the value of the BLCO equity stake, which is approximately 88%.
InvestingPro data indicates that Bausch Health maintains a total debt to total capital ratio of 0.88, underscoring the importance of this refinancing effort. The company’s gastrointestinal drug Xifaxan is currently under scrutiny due to ongoing litigation and the potential implications of newly announced tariffs. RBC Capital is particularly interested in receiving updated commentary from the company regarding these issues.
The upcoming Q1/25 earnings announcement for Bausch Health is set to coincide with the first-quarter results of BLCO, which will be released before the market opens on the same day, April 30. Investors and analysts are keenly watching the company’s performance, management’s strategic plans, and updates on key products like Xifaxan.
In other recent developments, Bausch Health Companies Inc. announced the pricing of an upsized $4.4 billion senior secured notes offering, which is set to close in April 2025. The proceeds from this offering are aimed at repaying existing credit agreements and redeeming senior secured notes that are due between 2025 and 2028. This refinancing strategy includes the issuance of $4 billion in new senior secured notes and securing $3.4 billion under a new term loan facility, all part of the company’s broader effort to manage its debt effectively.
S&P Global Ratings has responded positively to these moves, upgrading Bausch Health’s issuer credit rating to ‘B-’ from ‘CCC+’. This upgrade reflects the company’s successful refinancing of $6.87 billion in debt due from 2025 to 2028, which alleviates near-term refinancing risks. However, the outlook remains negative due to potential challenges that could arise, such as an earlier-than-expected generic launch for Xifaxan and significant Medicare price reductions anticipated in 2027.
Raymond James analyst Michael Freeman has maintained a Market Perform rating for Bausch Health, noting the company’s strategic efforts to pay down high-interest debt. This move could enhance financial flexibility and facilitate the separation of its subsidiary, Bausch + Lomb Corporation. The company’s recent strong operating performance, characterized by seven consecutive quarters of revenue growth, supports these strategic developments.
However, the potential sale of Bausch + Lomb, which was halted in February 2025, remains a critical factor in the company’s overall financial strategy. Investors are eager to see how these developments unfold as Bausch Health continues to navigate a challenging market landscape.
Meanwhile, RBC Capital Markets has also made headlines with its revised outlook on Verisk Analytics (NASDAQ:VRSK), raising the price target to $314 from the previous $300 while maintaining an Outperform rating. Verisk's ability to leverage market volatility and sustain strong revenue growth, particularly in its subscription services, has attracted attention from analysts.
According to InvestingPro data, Verisk commands a substantial market capitalization of $38.9 billion and trades at a premium valuation with a P/E ratio of 41.49. Analysts at RBC Capital Markets expect high single to low double-digit subscription revenue growth in the first quarter of 2025, supported by a record sales performance in 2024 and effective pricing strategies.
Verisk has demonstrated solid execution with revenue growth of 7.47% and impressive gross profit margins of 68.73% over the last twelve months. RBC Capital anticipates that Verisk will achieve operating leverage, leading to an expansion of margins by over 75 basis points. The analysts highlight Verisk’s position as the most defensive Information Services stock within their coverage universe, emphasizing its capability to navigate through periods of market volatility effectively.
In other recent developments, RBC Capital maintained an Outperform rating for Verisk, citing accelerated subscription growth of 11% year-over-year, driven by effective pricing strategies and customer acquisitions. Financial projections for fiscal year 2025 align with expectations, although increased expenses may impact earnings growth.
BMO Capital Markets raised Verisk’s stock target to $297, noting a slight beat on adjusted earnings per share for the fourth quarter and highlighting growth in the Underwriting and Claims segments. Morgan Stanley also adjusted its outlook, increasing the price target to $305, recognizing Verisk’s 8.6% organic growth for the quarter.
Verisk’s CargoNet business has seen significant developments, teaming up with GearTrack to enhance cargo security by offering risk assessment tools and theft prevention strategies. Additionally, Verisk Marketing Solutions has partnered with Cygnus Marketing Communications to improve student recruitment processes for higher education institutions.