JPMorgan says Bausch + Lomb ‘not a cash cow’ for private equity

JPMorgan analyst Robbie Marcus keeps a Neutral rating on Bausch + Lomb after the Financial Times reported the company has hired an investment bank to explore a potential sale, with interest likely from private equity firms. Bausch + Lomb shares trade at a discount to other eye care companies like Cooper (COO) and Alcon (ALC), the analyst tells investors in a research note. The firm, however, says the valuation discount is justified since over 70% of Bausch’s EBITDA comes from its Consumer and Prescription Ophthalmic Drug segments. In other words, “it’s primarily a drug company,” contends JPMorgan. The firm believes that while the company has strong global brand name awareness, it “is not a cash cow asset that a private equity firm could milk for cash, improve margins through cutting expenses, and then flip for profit.”