Bausch + Lomb (BLCO): Assessing Valuation After Icahn-Linked Board Shake-Up

Bausch + Lomb (NYSE:BLCO) recently experienced a shakeup in its boardroom that could have long-term implications for investors. Brett M. Icahn and Gary Hu stepped down as directors after the company’s appointment and nomination agreement with Carl Icahn and his affiliates was terminated. This decision was prompted when the Icahn group’s stake in Bausch Health, the parent company, fell below a critical threshold. While the company expressed appreciation for their contributions, board turnover of this kind often sparks fresh debate about the direction of governance and future priorities at Bausch + Lomb.

It is worth noting how these changes fit into a dynamic year for BLCO. The stock has seen meaningful gains, climbing almost 33% over the past three months after lagging earlier in the year, though the one-year return is still down 8%. That type of price action suggests shifting sentiment among investors, possibly as perceptions about risk and the company’s growth story evolve. Recent board exits present another consideration for market watchers weighing strategic stability against new opportunities.

With BLCO’s recent jump, some may wonder whether investors are seeing a genuine value opportunity after last year’s underperformance, or if the market is already factoring in future growth and a reset in governance.

Price-to-Sales of 1.1x: Is it justified?

Bausch + Lomb appears undervalued based on its price-to-sales (P/S) ratio compared to both industry peers and broader sector averages.

The P/S ratio measures a company’s stock price relative to its revenues. This offers insight into how the market values each dollar of sales. This metric is especially relevant for healthcare companies like Bausch + Lomb, where profitability may fluctuate, but revenue growth remains a key indicator of business traction.

At 1.1x, BLCO trades well below the US Medical Equipment industry average of 2.8x, the peer average of 2.4x, and also under the estimated fair ratio of 2.2x. This may indicate that the market is discounting the company’s future growth potential or its current unprofitability.

Result: Fair Value of $37.83 (UNDERVALUED)

See our latest analysis for Bausch + Lomb.

However, slowing revenue growth and continued net losses could limit further upside if market sentiment shifts or if operational improvements fall short of expectations.

Find out about the key risks to this Bausch + Lomb narrative.

Another View: DCF Model Insight

The SWS DCF model offers a different perspective and also points toward undervaluation for Bausch + Lomb. This approach calculates value based on projected future cash flows rather than focusing only on current sales. Could both models be missing something?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Bausch + Lomb for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Bausch + Lomb Narrative

If you see things differently or want to dive deeper into the numbers, you can build your own narrative in just a few minutes. do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Bausch + Lomb.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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