Fly News Breaks for February 20, 2020
Feb 20, 2020 | 12:56 EDT
JPMorgan analyst Chris Schott views Wednesday's post-earnings selloff in shares of Bausch Health as overdone and believes management commentary on the call suggests a split of the company may be more a matter of "when" and not "if." On the potential for a split/spin of the "attractive" eye care business, management acknowledged the market's interest for pure-play businesses and appeared much more open to the idea of a split or spin to unlock value over time, Schott told investors last night in a research note. Even assuming a "significant discount" for Bausch & Lomb versus other stand-alone eye care businesses, a separation would unlock "significant value" for the company, contends the analyst. In addition, the analyst sees both an acceleration in sales growth as well as margin expansion for Bausch Health beyond 2020. He keeps an Overweight rating on the shares with a $38 price target. The stock in afternoon trading is down 3% to $25.76.
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