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The headquarters of Valeant Pharmaceuticals International Inc., seen in Laval, Que.© Christinne Muschi / Reuters

Valeant Pharmaceuticals International Inc. left even its most supportive analysts with a sense of unease after a conference call this week to review reduced profit targets.

"How do we get comfortable that Valeant is able to execute and deliver for shareholders?" Shibani Malhotra, analyst with Nomura Securities, asked chief executive Michael Pearson on the call Tuesday. At the time, she had labelled the stock a "buy" and posted a $175 (U.S.) price target on it. But the build up of negative news shook her confidence.

Mr. Pearson responded that Valeant and the management team would have to earn back its credibility over time. "We've got some underperforming businesses; that's on us, right? That's totally on us," he said.

As the two-hour call went on, the drugmaker's stock sank. Not only is Valeant still grappling with investigations and months of controversy related to its business practices, but it released targets for 2016 that were below recent guidance, and far lower than many analysts and investors had expected. Other issues, such as high debt levels and an outstanding annual report, or 10-K form, also clouded the outlook. By Wednesday afternoon, shares were hovering below $34.

Management comments weren't enough to restore Ms. Malhotra's trust. She downgraded the stock to "neutral" from "buy" on Wednesday, and trimmed her price target to $60, in a note titled "We have lost conviction on Valeant."

Several other analysts downgraded their ratings on Valeant this week, leaving the stock with 10 buy and neutral ratings, and four sell ratings, according to Bloomberg data. One year ago, the stock had 17 buy ratings, with just one sell and one hold.

The average analyst 12-month price target is now $90.28 (U.S.), still nearly triple the current price of near $34. A year ago – when the stock was trading near $202 – the average target was $210.80.

Here are some other highlights from the latest analyst commentary (Price targets in U.S. dollars):

CIBC World Markets – Prakash Gowd

Downgraded Valeant from "sector performer" to "sector underperformer", with price target moving from $90 to $24.

"Management credibility continues to be poor, and today's call did nothing to improve that. An incorrect figure in the guidance further fueled the lack of confidence. We believe a management change will likely happen, although the rate-limiting step is finding a replacement CEO, which could prove difficult. ... We have always been concerned with many of Valeant's business practices, and we believe even long-time supporters may have lost confidence in management's ability to see the business through this turmoil."

Piper Jaffray – David Amsellem

Downgraded Valeant from "neutral" to "underweight", with his price target suspended.

"...the ever-shifting commentary from VRX surrounding a number of segments in our view suggests that management simply does not have a handle on the health of its own business... Our [price target] continues to be suspended given the absence of audited financials."

Nomura Securities – Shibani Malhotra

Downgraded from "buy" to "neutral", with the price target moving from $175 to $60.

"We admit upfront, we have been humbled by our stock call on VRX, which we have defended despite the continuing spate of bad news, as we believed that despite the noise surrounding the company, much of the fundamental businesses had been performing well."

Morgan Stanley – David Risinger

Maintained an "equal weight" rating and lowered the price target to $39 from $98.

"There is risk that key employees could depart since CEO Pearson mentioned on the call "[VRX] just paid bonuses for the year on Friday" and stock awards are way out of the money. While valuation appears cheap and is at all-time lows, we do not see valuation alone as a reason to be bullish on the name given ongoing uncertainty."

RBC Dominion Securities – Douglas Miehm

Maintained a "sector perform" rating but lowered his price target to $69 from $85.

"Debt covenants and default concerns. We believe these issues precipitated the largest contributor to share price weakness. We also note that if VRX does not file its 10-k by March 30, a default will occur under the company's bank credit agreement.... Until this and other issues are resolved, many investors have called this "un-investible"."

Susquehanna Financial Group – Andrew Finkelstein

Kept a "neutral" rating and lowered his price target to $35 from $105.

"Bull Case: Investors migrating to a sum-of-the-parts approach to valuation seems the most likely rationale for generating this recovery in the near-term despite management's insistence that targeted asset sales and not business divestitures are on the agenda.

Bear Case: With debt trading at a discount there could be incentive to push for sales of "crown jewel" assets to ensure the principal is repaid even if shareholder value is not maximized."

Standard & Poor's Ratings Services – David Kaplan

S&P Wednesday afternoon put Valeant's debt under a negative "CreditWatch," a term it uses to indicate the potential direction of a rating. "We estimate thinning cushion on financial covenants could constrain financial flexibility," said Mr. Kaplan, a credit analyst. "If performance falls short of current expectations the company could be forced to pursue a covenant waiver or asset sales."

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