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 Inc9.22 CAD-4.36

About Author

Andrew Willis

Andrew Willis  is Senior Editor at Morningstar.ca. He previously produced content for Fidelity Investments and finance events for Euromoney Institutional Investor and has written in the past for Thomson Reuters and CNN. Follow him on Twitter @AndrewWillisCDN.

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