Over the Newswire
Concordia International (TSX:CXR):
A proposed debt offering has taken Laurentian Bank Securities analyst Joseph Walewicz by surprise and left him feeling bearish about Concordia International (TSX:CXR).
Walewicz says this debt offering suggests forthcoming results that will be weaker than he had forecast.
“We had forecasted that CXRX had sufficient cash flows to meet its obligations, including the upcoming earn outs for the AMCo transaction. With this offering the company is signalling that it needs additional capital to meet the earn outs (£72M in Q4/16, and another ~£74M in Q1/17). We should get greater clarity about the pro forma outlook when CXR reports in a few weeks,” says the analyst, adding: “Unfortunately, we see no near term catalysts for the stock.”
In a research update to clients today, Walewicz lowered his rating on Concordia International from “Hold” to “Reduce” and cut his one-year price target on the stock from to $3.50.