Bausch (BHC) Up 21.4% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Bausch Health's recent earnings report showed mixed results, with adjusted earnings per share missing estimates while total revenues exceeded expectations, leading to a 21.4% increase in shares over the past month, outperforming the S&P 500 [1][2]. Financial Performance - Adjusted earnings per share for Q2 were 90 cents, missing the Zacks Consensus Estimate of 97 cents, but up from 89 cents in the same quarter last year [2]. - Total revenues reached $2.53 billion, reflecting a 5% year-over-year increase and surpassing the Zacks Consensus Estimate of $2.5 billion [2]. - Organic revenue growth, excluding foreign exchange impacts and acquisitions, was 4% [3]. Segment Performance - Salix: Revenues totaled $627 million, up 12% year-over-year, driven by strong demand for Xifaxan and significant growth in Trulance and Relistor [4][5]. - International: Revenues were $278 million, a 1% increase year-over-year, but missed estimates; organic growth was also 1% [6]. - Solta Medical: Reported revenues of $128 million, a 25% increase year-over-year, driven by global volume expansion, although it missed the model estimate [7]. - Diversified Products: Revenues decreased by 13% to $219 million, with declines in neurology, dermatology, and generics [8][9]. - Bausch + Lomb: Revenues were $1.3 billion, up 5% year-over-year, exceeding estimates, with a 3% organic growth driven by the vision care segment [9]. Pipeline Development - Bausch Health is reviewing its pipeline candidate amiselimod for ulcerative colitis treatment [10]. - The company submitted an application for Cabtreo, a topical acne treatment, to the EMA, with approval received in Canada [11]. - Ongoing phase III studies for rifaximin are expected to yield top-line results by early 2026 [11]. - The Clear and Brilliant Touch program is advancing with approvals in multiple countries, awaiting European regulatory response [12]. - The FraxelFTX fractional laser system was launched in the U.S. in April 2025 [13]. Guidance Updates - Bausch Health revised its revenue guidance for 2025 to a range of $10-$10.25 billion, up from the previous $9.95-$10.2 billion [14]. - Bausch + Lomb revenues are now expected to be between $5.05-$5.15 billion, an increase from the prior guidance [14]. Market Sentiment - Recent estimates have shown a flat trend, indicating stable investor sentiment [15]. - Bausch Health holds an average Growth Score of C, a Momentum Score of A, and an aggregate VGM Score of A, placing it in the top quintile for investment strategy [16]. - The company has a Zacks Rank of 4 (Sell), suggesting expectations of below-average returns in the coming months [17].