×

Things can always get worse: Valeant analyst

The bad news keeps coming for Valeant.

Following a series of missteps that included accounting misstatements and oversights by ousted CEO Michael Pearson, Valeant reported disappointing quarterly earnings on Tuesday.

The company missed estimates on both the top and bottom line, and it also substantially lowered full-year guidance.

While some investors have been optimistic that new CEO Joseph Papa will be able to turn the company around, not everyone is convinced.

Wells Fargo's David Maris has been bearish on the stock since he initiated coverage back in February. Since then he has been trimming his price target, and has correctly called each new sell-off.

With shares of the drug-maker already down 72% since his call, David Maris joined the "Halftime Report" to discuss why the stock still has lower to go.

"Just when we think we expect everything bad, they [Valeant] find a way to surprise us to the negative" -David Maris, Wells Fargo

David Maris cut his price target further today based on the company's weak fundamentals. Valeant's drug pipeline is not promising, and the cash flow is bolstered my drug price increases rather than the strength of the company's medicines, he argued.

Maris highlights the unprofitable Walgreens deal, as well as the drug-maker's $32 billion debt obligation as additional reasons to stay away from the stock.

Maris also isn't confident that Papa will be able to turn around Valeant given the company's wide-ranging issues.

"I look at the performance of Valeant, and this isn't a one person job. This is a culture that's been negative for a while," he said on the "Halftime Report".

While billionaire-investor and Valeant board member Bill Ackman has said that a sale of the company's assets won't be necessary, Maris disagrees.

He believes that an asset sale, additional loans, and even a bankruptcy re-organization are all options for the company going forward.

Trader disclosure: On June 8, 2016 the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Halftime Report" were owned by the "Halftime Report" traders:

Josh Brown: Long AAPL, CORE, DE, DNKN, GE,LNKD, SAM, SHAK, TWTR, XLE.

Jon Najarian: Long PEP Long Calls BURL, FB, GDX, GILD, MO, MSFT,RTN, WFM, WFT, YHOO

Pete Najarian: Long AAPL, BAC, BMY, CSCO, DIS,DISCA, GE, KMI, KMI.A, KO, LUX, MRK, PEP, PFE, SAVE, VIAB, ZIOP. Long Calls: AAL, ABBV, AKS, AMJ, BAC, C, CHK, CSCO, CSX, DAL, EGO, EWZ, GLW, GS, GSAT, HBAN, KGC, LLY, M, MDLZ, MSFT, MT, MU, NLNK, P, SLV, SVU, TMUS, UAL, WYNN, X, YHOO. Long puts: BID, FCX, GM, NAV, SCTY, VLO

Joe Terranova: Long BLK, DPZ, FB, IWM, NXPI, ORCL,PNC, VIRT, VRTS