Why is Bausch so Cheap?

An accounting scandal overshadows an intriguing investment opportunity.

Andrew Willis 17 June, 2022 | 4:08AM
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Andrew Willis: Remember Valeant Pharmaceuticals? It’s hard to blame investors for being skeptical of a company that misled investors. But the company, now known as Bausch Health (BHC), has since moved on from its drug-price-hiking days, says equity analyst Aaron Degagne – and what’s left looks severely undervalued…

Consider the company’s well-known eye-care segment, Bausch & Lomb. The subsidiary currently trades at a market cap of 6.1 billion U.S. dollars. Meanwhile, the parent company, Bausch Health, trades at a market cap of 3.3 billion…

Even if you assume Bausch’s drug business has an equity value of zero – a view we share with the market – what investors are worried about might just be the icing on the cake.

For Morningstar, I’m Andrew Willis.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Bausch Health Companies Inc10.76 CAD-2.00Rating

About Author

Andrew Willis

Andrew Willis  is Senior Editor at Morningstar.ca. Follow him on Twitter @AndrewWillisCDN.

 

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