Investors should buy Bausch Health Companies as shares can more than double from here, Jefferies said. Analyst Glen Santangelo upgraded shares to buy from hold and hiked his price target, saying a legal victory is in sight for the company that should drive shares higher. Bausch Health is embroiled in a legal battle over Xifaxan, its drug for irritable bowel syndrome with diarrhea, to prevent generics from entering the market. BHC 1D mountain Bausch Health Companies 1-day "As we have written, we believe BHC will ultimately prevail in the Xifaxan litigation and prevent gx entry until 2028. On the 2Q call, mgt noted that it expects updates in the Norwich v FDA case in 4Q23 and an update on the appeals process as early as 1Q24," Santangelo wrote Wednesday. "These updates are critical as we [continue] to believe unresolved Xifaxan litigation is the key barrier to progressing with the BLCO spin," he added. Bausch Health has been hoping to spin off its valuable vision care unit, Bausch + Lomb, for several years. Bausch Health shares are higher this year by more than 22%. However, the analyst hiked his price target to $16 from $9, implying shares can rise 107% from Tuesday's closing price of $7.72. Shares jumped nearly 7% in premarket trading Wednesday. The analyst cited other reasons why Bausch Health shares will get a boost. These reasons include reducing a significant debt load from acquisitions made by prior management, according to the note. According to Santangelo, other catalysts include the sale of a 9% stake in Bausch + Lomb, which would reduce the company's holdings to 80%; further debt reduction; the settlement of a New Jersey lawsuit; and a solvency opinion. With clarity on Xifaxan coming in the near term, Jefferies expects shares to start reflecting the increasing likelihood of the spinoff of the vision care unit, Santangelo wrote. — CNBC's Michael Bloom contributed to this report.
