Piper Jaffray analysts David Amsellem and Sameer Singh believe Valeant's valuation and recent rally is overly optimistic, Barron's reports.
Here's what you should know:
1. Piper Jaffray issued Valeant an underweight rating and a $10 price target.
2. Valeant recently delayed significant debt maturities until 2020, and reduced its current debt through asset sales leading to the rally.
3. The analysts believe Valeant's net debt being seven times more than its estimated fiscal year 2017 EBITDA paired with unfavorable trends tied to crucial U.S. segments is problematic.
According to their projections, Valeant has no organic EBITDA growth in the coming years, and because of that, analyst valuations more than nine times over Valeant's estimated 2017 EBITDA "[do] not make sense."