Analyst Upgrades Valeant Stock to Buy

However, most other analysts have not been so optimistic

by Emma Duncan

Published on May 15, 2018 at 9:46 AM
Updated on Jun 24, 2020 at 10:16 AM

Shares of drug name Valeant Pharmaceuticals Intl Inc (NYSE:VRX) are trading higher this morning, after the stock received an upgrade from Mizuho to "buy" from "neutral" and a price-target hike to $27 from $15, with the analyst in coverage calling the company's portfolio "Mylan-like." In response, VRX is up 2.8% at $21.40, at last check.

Longer term, VRX stock has been flying up the charts since bottoming out at a near-term low of $14.96 in early April, adding 43% -- most recently, thanks to an earnings bull gap. Today's pop has the security trading above the $21 level for the first time since late January. 

Other analysts have not been so optimistic toward Valeant stock, however, with the average 12-month target price target coming in at $20.38 -- a discount to current levels. Further, of the 12 brokerage firms covering VRX, seven sport "hold" or "strong sell" recommendations. More bullish brokerage notes could help keep the wind at the equity's back.

Those looking to bet on Valeant's near-term trajectory with options are in luck, too. The stock's Schaeffer's Volatility Index (SVI) of 0.39 ranks in the lowest annual percentile, suggesting short-term options have rarely been cheaper, from a volatility standpoint.

It's also worth noting that Valeant stock sports a Schaeffer's Volatility Scorecard (SVS) of 99 out of 100. This higher ranking means the equity has tended to register bigger price swings than its options premiums have priced in over the past 12 months.


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