Jefferies has maintained its Buy rating on Bausch & Lomb Corporation (NYSE: BLCO) with a steady price target of $25.00.
The firm's endorsement of the company's stock comes with a recognition of the value present in BLCO, which is expected to be further realized following the completion of the Bausch Health Companies (NYSE:BHC) spinoff.
The analyst from Jefferies highlighted BLCO's progress since its initial public offering, citing advancements in new product approvals, strategic mergers and acquisitions, and a robust schedule for launching new products.
These factors are anticipated to support high single-digit growth and an increase in EBITDA.
Jefferies perceives Bausch & Lomb as a compelling investment, particularly attractive to private equity firms and strategic buyers. This sentiment is bolstered by reports of at least six private equity firms showing interest in acquiring BLCO.
In collaboration with Glen Santangelo, who is bullish on BHC with a raised price target of $10, Jefferies conducted a leveraged buyout (LBO) analysis to evaluate the potential acquisition price for BLCO.
In other recent news, Bausch + Lomb reported a robust 20% constant currency revenue growth in the second quarter of 2024, across all segments and regions. This growth was bolstered by strategic product launches such as the enVista NV intraocular lens, Blink NutriTears, and Bausch + Lomb INFUSE contact lenses.
In light of these results, the company raised its full-year revenue forecast to between $4.7 billion and $4.8 billion and adjusted its EBITDA guidance to a range of $850 million to $900 million.
The company expects this trend of double-digit growth to continue into 2025, with plans to further invest in research and development, product development, and market expansion. Bausch + Lomb is also launching a Direct-to-Consumer platform, Opel, and a tool called Glimpse. Despite a strong performance, the company anticipates breakeven to slightly negative cash flow due to working capital and inventory management.
CEO Brent Saunders emphasized the importance of execution, sales excellence, and innovation during the earnings call. The company is also awaiting U.S. approval for their trifocal lens and is studying EDOF lenses for a 2026 launch.
InvestingPro Insights
As Bausch & Lomb Corporation (NYSE:BLCO) garners positive attention from Jefferies, real-time data and insights from InvestingPro provide a deeper dive into the company's financial health and market performance. BLCO's market capitalization stands at $7.04 billion, indicating a significant presence in the market. Despite a challenging P/E ratio of -12.27, revenue growth remains strong, with a 15.14% increase over the last twelve months as of Q2 2024.
InvestingPro Tips highlight that BLCO operates with a significant debt burden, which investors should consider when evaluating the company's long-term sustainability. However, analysts are optimistic about BLCO's future, with net income expected to grow this year and six analysts having revised their earnings upwards for the upcoming period. Additionally, the company has seen a strong return over the last week, month, and three months, with a 27.8%, 24.61%, and 35.69% price total return respectively.
For investors seeking more comprehensive analysis, there are additional InvestingPro Tips available, which can be explored for a more nuanced understanding of BLCO's investment potential. These tips provide valuable insights for those considering the stock, especially in light of Jefferies' positive outlook and the potential interest from private equity firms.
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