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JPMorgan downgrades Valeant on earnings uncertainty

Valeant in the New York Stock Exchange
Brendan McDermid | Reuters
Valeant in the New York Stock Exchange

JPMorgan lowered its rating for Valeant Pharmaceuticals to neutral from overweight on downside risk to the company's guidance and finances.

"While we have admittedly supported the stock through recent controversies on a valuation basis (and we continue to see an attractive SOTP valuation case), we are moving to the sidelines as we see a number of uncertainties around core business trends that are unlikely to be resolved in the near-term," JPMorgan's Chris Schott wrote in a note to clients Thursday.

"Most notably, Xifaxan, which represents a key growth driver for the company, continues to underperform our expectations, and we do not see a clear path to re-acceleration for the product."