BHC – Given management’s confidence about their eye health business, script recovery, and ProBalance Technology, market expectations are overly bearish, and longer-term equity outperformance is warranted

• Bausch Health Companies Inc. (BHC:USA) currently trades well below corporate averages relative to UAFRS-based (Uniform) earnings, with a 9.2x Uniform P/E, implying bearish expectations for the firm. However, given management’s confidence about theireye health business, script recovery, and ProBalance Technology, market expectations are overly bearish, and equity outperformance is warranted
  
  

• Specifically, management is confident about their decision to spin-off their eye health business as an independent publicly traded company and that investors will favor the eye health business as a stand-alone company. Management is also confident that script declines have reversed trends as of June 2020. In addition, they are confident that the infused ProBalanceTechnology helps maintain ocular homeostasis and reduces the symptom of contact lens-induced dryness, and that their franchises are positioned to recover when the coronavirus impact subsides