Tears of Joy at Bausch & Lomb

JP Morgan analyst Michael Weinstein, who began questioning B&L's earnings quality a year ago, sees clear reason for concern.

"Continued uncertainty regarding the ultimate timing and results of the company's internal audits, as well as the ongoing investigation into the cause of the recent Fusarium keratitis outbreak among B&L lens-care-solution users, leads us to steer clear of the shares even at these levels," Weinstein wrote earlier this month. "We expect BOL shares to remain under pressure until the company can put these issues substantially behind it."

Weinstein has an underperform rating on B&L's stock. His firm helped manage a recent offering of B&L securities and plans to seek additional investment banking business from the company going forward.

In the meantime, Fitch downgraded B&L's credit rating to BBB-minus -- just one notch above junk status -- on Friday. The firm has maintained its negative outlook on the credit, signaling the possibility for another downgrade.

Fitch cited growing concerns about the company's ReNu franchise -- as well as liquidity risks following a recent tender offer -- when explaining its downbeat view.

"Regardless of the causative factor (of the fungus), BOL will have to invest significantly to rebuild the ReNu brand, and it will likely take time," Fitch wrote last week. And "while Fitch believes BOL has sufficient cash to finance the tender offer, the firm's liquidity will be decreased. Given the challenges BOL currently faces, access to the capital markets will likely become more expensive, should it need to do so."

Equity analysts remain nervous about the company as well. At least half a dozen of them downgraded the company's stock last month alone.