Bausch (BHC) Upgraded to Buy: Here's Why

Core Viewpoint - Bausch Health (BHC) has received an upgrade to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on the Zacks Consensus Estimate, which reflects EPS estimates from sell-side analysts for the current and following years [1]. - Changes in a company's earnings potential, as indicated by earnings estimate revisions, are strongly correlated with near-term stock price movements [4]. - Institutional investors often rely on earnings estimates to determine the fair value of a company's shares, leading to buying or selling actions that affect stock prices [4]. Implications of the Upgrade - The upgrade for Bausch indicates a positive outlook for its earnings, which could lead to increased buying pressure and a rise in stock price [3][5]. - Rising earnings estimates suggest an improvement in Bausch's underlying business, which should be reflected in higher stock prices as investors respond positively [5]. Earnings Estimate Revisions - For the fiscal year ending December 2025, Bausch is expected to earn $3.85 per share, unchanged from the previous year, but the Zacks Consensus Estimate has increased by 7.5% over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [7]. - Bausch's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10].