On Monday, RBC Capital adjusted its outlook on Bausch & Lomb Corp. (NYSE: BLCO), reducing the stock price target to $18 from the previous $20 while maintaining an Outperform rating on the stock. The revision comes ahead of the company's first-quarter earnings report, set to be released before the market opens on May 1, 2024.
The firm anticipates Bausch & Lomb to report Q1 2024 revenue of $1,069 million, slightly above the consensus estimate of $1,063 million. The adjusted EBITDA expectation stands at $178 million, which is in line with the consensus of approximately $177 million. According to RBC Capital, foreign exchange headwinds are projected to impact the company's financials by roughly $10 million during the quarter.
The focus for the upcoming earnings report is expected to be on the performance of Xiidra and Miebo as well as other new product launches. Market data from IQVIA suggests that Miebo has had a strong launch, but Xiidra continues to show weak performance.
The decision to lower the stock price target to $18 is primarily attributed to the de-rating of comparable companies and, to a lesser extent, a revised outlook for Bausch & Lomb. Despite these challenges, the Outperform rating suggests that RBC Capital remains optimistic about the company's potential to outperform the market.
InvestingPro Insights
As Bausch & Lomb (NYSE: BLCO) approaches its first-quarter earnings report, a closer look at real-time data and insights from InvestingPro can provide a deeper understanding of the company's financial health and market position.
With a market capitalization of $5.14 billion and a revenue growth of 10.03% in the last twelve months as of Q4 2023, BLCO is showing signs of expansion. Still, its high EBIT valuation multiple and a negative P/E ratio of -21.80 indicate that investors are pricing in future growth expectations rather than current profitability.
InvestingPro Tips highlight that BLCO operates with a significant debt burden and has not been profitable over the last twelve months. Yet, analysts predict that the company will be profitable this year, and net income is expected to grow.
These insights suggest that while there are risks associated with BLCO's financial structure, there is also optimism about its future performance. Notably, BLCO does not pay a dividend, which could be a consideration for income-focused investors.
For those looking to delve deeper into Bausch & Lomb's financials and market potential, InvestingPro offers additional tips and metrics. By using the coupon code PRONEWS24, readers can get an extra 10% off a yearly or biyearly Pro and Pro+ subscription, providing access to comprehensive analysis and data to inform investment decisions. With the next earnings date on May 1, 2024, and a fair value estimate of $20 by analysts versus InvestingPro's fair value of $12.31, investors have valuable information to weigh before the report's release.
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