Ka-boom ... Shares of Valeant Pharmaceuticals (VRX) were cut in half today after the company cut its 2016 revenue forecast by 12% and said a delay in filing its annual report could pose a debt default risk. Our Healthcare analysts Tom Tobin and Andrew Freedman have been warning about the company's "unsustainable business model" for a while now.
"VRX | BEAR CASE $20 | REDEMPTION CYCLE" --11/5/15
"THE VALEANT IMPLOSION PART 1" -- 11/15/15
- ORIGINAL VALEANT PHARMACEUTICALS "BLACK BOOK," -- July 2014
Here's the "VRX | Bear Case $20" note in its entirety:
Never fear Valeant shareholders! Wall Street consensus still sees 257% upside from here.
Click to enlarge
Now, that's obviously ridiculous. But so is the sell side's track record for predicting a VRX price target. Check out the chart below. Keep in mind that Valeant shares currently trade around $35.