Bausch Health – The Textbook Turnaround

Giving Credit Where Credit is Due – Target Price $40

Published October 15th, 2019 | Citron Research

It was four years ago this month that Citron wrote a series of articles that were instrumental in the unraveling of the Pearson-era Valeant business model.  In quick manner the stock has declined by 90% from its highs as the scandals unraveled and many questioned the sustainability of the equity.

Four years later BHC still trades with a “Valeant discount” despite new management’s 180-degree turn of corporate culture.  To add to the artificially depressed share price, Bausch has been unjustly grouped with Specialty Pharma despite having ZERO opioid exposure and minimal exposure to the generics market.

Citron believes this quarter (reporting on Nov 4) will force Wall St. to finally take notice of BHC’s “pivot to offense”.  Once this is considered along with the acknowledgment of the recent M&A spree in pharma, even David Maris will have to admit that BHC is on its way to $40.