BHC heads into its April 29 Q1 results with options markets flashing an unusually bullish lean — a notable contrast to the cautious positioning more typical ahead of a heavily indebted pharma print.
The options signal is the sharpest data point into the event. The put/call ratio dropped to 1.09 on April 27, a full 2.25 standard deviations below its 20-day average of 1.73. That is close to the 52-week low of 0.97 and suggests call positioning is unusually dominant. The reset is striking given the ratio has spent most of the past month between 1.67 and 2.21. Short interest reinforces the non-aggressive tone: at 1.6% of the free float — down roughly 9% versus a month ago — bears have not been loading up ahead of the release. Utilization has eased to 6.3%, less than a third of its 52-week high of 21.8%, and cost to borrow remains near 0.6%. The lending market is relaxed; there is no squeeze pressure here.
The price backdrop is mixed. BHC has recovered 11% over the past month to $5.58, yet gave back nearly 6% in the most recent week. That pattern — a rally followed by modest retreat — reflects genuine uncertainty about whether the recent bounce was fundamental or noise. Two prior earnings events both produced small negative day-one moves (roughly -1%), though one recovered to a modest 5-day gain. The stock is still down about 19% year-to-date.
The debate heading into the print splits cleanly on geography and debt. Bulls point to the Solta Medical segment, which grew 28% year-over-year on an organic basis, and to solid Canadian market performance driven by Ryaltris and promoted products. Bears focus on the international franchise — Latin American revenues fell 14% year-over-year — and on the longer-term drag from IRA-related headwinds, with consensus projecting a 7% revenue decline by 2027. The balance sheet is the structural bear case: net debt runs at approximately $18 billion against estimated EBITDA of roughly $3.9 billion, an EV/EBITDA multiple near 5.9x. RBC Capital trimmed its target from $10 to $9 yesterday while keeping a Sector Perform rating — a signal that the Street acknowledges recent segment strength but remains cautious on the macro overlay. The mean analyst target of $7.57 implies around 37% upside from the current price, yet all recent changes have been neutral-to-downward in direction.
Ownership concentration adds an unusual dimension to the setup. Paulson & Co. holds nearly 20% of shares, with GoldenTree and Alexander Meruelo together accounting for another 19%. This tight top-end ownership can dampen the tradeable float and amplify moves. The CEO sold approximately $6.8 million worth of stock in early March — a meaningful outright sale, not a tax-related exercise — though that trade is now nearly two months old.
The print is therefore less about whether Bausch Health can grow its higher-margin segments and more about whether free cash flow generation is sufficient to address a debt load that continues to define the equity's risk profile.
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