Valeant Could Slash Earnings Guidance Again -- Morgan Stanley

After cutting its 2016 earnings guidance twice already this year, Valeant Pharmaceuticals (VRX) is expected to once again lower its earnings forecast on next week's much-anticipated earnings call, analysts with Morgan Stanley said in a Tuesday investment note. Morgan Stanley expects that Valeant's selling, general and administrative expenses for 2016 will likely clock in at about 28 percent of the company's total sales for the year, versus the 26 percent management forecasts, and analysts estimates $1.3 billion of SG&A expenses for the first half of the year alone. And as Real Money reported, further earnings cuts at Valeant could soon invite the debt-laden drugmaker's lenders to a favorable seat at the bargaining table if Valeant finds itself in need of amending the credit agreements and bond indentures that govern its roughly $31 billion of debt. Shares of Valeant are down roughly 92 percent over the past 12 months.

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