A Look At Bausch Health (BHC) Valuation After Its US$1.6b Debt Refinancing

Bausch Health Companies (NYSE:BHC) recently completed a refinancing that exchanges existing 2028 senior secured notes for US$1.6b of new 10.00% Senior Secured Notes due 2032. This transaction reshapes its long term debt profile for investors.

See our latest analysis for Bausch Health Companies.

The refinancing news comes as the share price trades at US$7.21, with a 90 day share price return of 12.83% contrasting with a 1 year total shareholder return decline of 7.56%. This suggests recent momentum has picked up after weaker longer term outcomes.

If this kind of balance sheet reshaping has your attention, it could be a good moment to look across other healthcare names, including healthcare stocks.

So with Bausch Health trading around US$7.21, a long term total return record that has been weak, and an intrinsic value estimate implying a large discount, should investors see mispricing here or assume the market already reflects future growth?

Most Popular Narrative Narrative: 100% Undervalued

The most followed narrative suggests fair value of around US$7.29 per share, which is very close to the last close at US$7.21, yet still framed as undervalued.

The analysts have a consensus price target of $7.083 for Bausch Health Companies based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $10.0, and the most bearish reporting a price target of just $5.0.

Read the complete narrative.

Want to see what keeps that fair value anchored near today’s price? Revenue is expected to edge lower while margins and earnings still climb. The real story sits in those forward earnings and the profit multiple they imply.

Result: Fair Value of $7.29 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, that story could change quickly if Xifaxan pricing is cut under U.S. Medicare negotiations, or if the company’s roughly US$16.1b debt load stays heavy.

Find out about the key risks to this Bausch Health Companies narrative.

Build Your Own Bausch Health Companies Narrative

If you see the data differently, or simply prefer to test your own assumptions, you can build a complete Bausch Health view in minutes using Do it your way.

A great starting point for your Bausch Health Companies research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

If Bausch has sharpened your focus, do not stop here. Broaden your watchlist with targeted stock ideas that match how you actually like to invest.

• Chase potential growth at smaller price points by checking out these 3562 penny stocks with strong financials that already show solid financial profiles.
• Spot companies at the crossroads of healthcare and artificial intelligence with these 29 healthcare AI stocks, where data, diagnostics and treatment technologies meet.
• Focus on income first and scan these 14 dividend stocks with yields > 3% to find companies offering yields above 3% that fit a cash flow focused approach.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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