On Monday, RBC Capital Markets adjusted its outlook for Bausch & Lomb Corporation (NYSE:BLCO) shares, increasing the price target from $18.00 to $20.00 while sustaining an Outperform rating on the stock. This adjustment comes ahead of the company's second-quarter earnings report, which is scheduled to be released before the market opens on July 31, 2024.
The firm anticipates that Bausch & Lomb will announce second-quarter revenues of approximately $1,187 million, which is slightly higher than the consensus estimate of $1,170 million.
Additionally, the adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) forecast is set at $209 million, surpassing the approximate consensus of $204 million.
Bausch & Lomb's second-quarter performance is expected to continue to face challenges from foreign exchange headwinds, estimated to be around $20 to $25 million.
However, the focus is likely to be on the company's prescription drugs for dry eye disease (DED), Miebo and Xiidra, along with new product launches and the impact of a recall in the surgical segment. According to IQVIA total prescription trends, Miebo has had a strong launch, but Xiidra has been underperforming.
The increase in the price target to $20 reflects a re-rating of comparable companies and, to a lesser extent, an updated outlook for Bausch & Lomb. The firm's analysis suggests optimism about the company's prospects, particularly in light of its upcoming quarterly financial report.
In other recent news, Bausch + Lomb Corporation, a global eye health company, has been making significant strides. Health Canada has approved the enVista Envy intraocular lens (IOL), the first worldwide regulatory approval for the product.
Clinical trials in Canada demonstrated promising results, with a majority of patients experiencing minimal visual disturbances and ease in viewing close objects without glasses. The company is also pursuing regulatory approvals in other markets, including Europe.
Morgan Stanley recently upgraded Bausch + Lomb's stock rating from Equal-weight to Overweight, based on the assessment that the company's core business is performing better than market expectations, specifically in terms of margin execution and potential for higher organic top-line growth.
On the financial front, Bausch + Lomb reported a strong first quarter in 2024 with a 20% top-line growth on a constant currency basis. This growth was seen across all business units and geographies, leading to an increase in the company's full-year constant currency revenue growth guidance to 30-50%.
The company also reaffirmed its revenue guidance of $4.6 billion to $4.7 billion for 2024, with adjusted EBITDA guidance at $840 million to $890 million. These developments underline the recent progress made by Bausch + Lomb.
InvestingPro Insights
As Bausch & Lomb Corporation (NYSE:BLCO) approaches its second-quarter earnings report, investors and analysts are closely monitoring the company's financial health and stock performance. According to InvestingPro data, BLCO has a market capitalization of approximately $5.97 billion and a revenue growth of 13.23% in the last twelve months as of Q1 2024, indicating a solid upward trajectory in sales. The company's strong price total return over the last three months stands at 15.98%, reflecting investor confidence and market momentum leading up to the earnings release.
Two InvestingPro Tips that may be particularly relevant for investors considering Bausch & Lomb's stock include the expectation of net income growth this year, which aligns with RBC Capital Markets' positive outlook, and the indication that the stock is currently in overbought territory based on the Relative Strength Index (RSI). This suggests that while the company's financials are showing promise, investors should be cautious of potential short-term price volatility.
For those looking to delve deeper into Bausch & Lomb's financials and stock analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/BLCO. To enhance your investment research, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, and gain access to the full suite of insights and data that InvestingPro has to offer.
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