Bausch & Lomb Corp (BLCO): what the price assumes

In the published model solve dated 2026-Q2, anchored at $17.15, Bausch & Lomb Corp (BLCO) is priced for +17.3% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-25.

Generated: 2026-08-30 · Exported: 2026-08-31 · Source: https://boothcheck.com/report/BLCO

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 7.4% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: elevated (limited comparison data)

Valuation X-Ray

The price is supported by asset-based value. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Asset

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 5.7%); the inversion above states its own rate.

Per-Model Detail (n=3)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Bullet Takeaways

• Three segments turned at once in the March 2026 quarter: the 10-Q reports that The Pharmaceuticals segment profit was $66 million and $11 million for the three months ended March 31, 2026 and 2025, with Vision Care at $202 million against $176 million and Surgical swinging to a $9 million profit from a $7 million loss.
• The capital structure is the whole risk: about 5.0 billion dollars of borrowings against 268 million dollars of liquid assets, at a weighted average stated interest rate of 7.72% as of December 31, 2025.
• Ownership is unusual and unresolved, with Bausch Health holding roughly 88% of the shares as of February 11, 2026 and a separation from that parent still proposed rather than done.

Bull Case

There is no dividend here and no buyback. Every dollar this company generates has somewhere it must go before it reaches a shareholder, and where it goes is the whole bull case. It goes into three product segments and into a debt stack that costs a weighted average stated rate of 7.72% a year as of the end of 2025. That is a brutal allocation constraint, and it is also a clarifying one: management cannot buy its way out of a bad quarter, so the only thing that improves the equity is the operating business improving.

In the March 2026 quarter it did, in all three places at once. The 10-Q reports that The Vision Care segment profit was $202 million and $176 million for the three months ended March 31, 2026 and 2025, that The Pharmaceuticals segment profit was $66 million and $11 million for the three months ended March 31, 2026 and 2025, and that The Surgical segment profit was $9 million for the three months ended March 31, 2026, as compared to a loss of $7 million for the three months ended March 31, 2025. Add those and segment profit went from about 180 million dollars to about 277 million dollars in a single year, on a company whose whole market value is 5.8 billion dollars.

The mix behind that improvement matters more than the amount. Devices, at 38% of revenue, and over-the-counter products at 36%, are the two largest lines, and the surgical part of the device business is where the operating leverage lives: the filing describes it as covering intraocular lenses ("IOLs") and delivery systems, phacoemulsification equipment and other surgical instruments and devices necessary for ophthalmic surgery. Equipment placements pull consumables behind them for years. A segment that swings from a loss to a profit on a shift toward premium product is the early part of that curve, not the late part.

The comparison that flatters this company is with the only listed business that does something similar in scale. COO earns an 11.8% operating margin on revenue of $4.23 billion growing 6.1%. This company runs about $5.21 billion of revenue growing at a similar mid-single-digit pace, and its through-the-cycle operating margin is 4.4%, so most of the gap between the two is margin rather than demand. Closing even part of that gap on a revenue base this size produces a very large number, which is exactly what the last four quarters of segment results started to show.

And there is a floor of a sort under the equity that is unusual for a levered business. Book value works out to 17.96 dollars a share against a price of $16.19. Buying the operations for less than the accountants carry them at is not a valuation argument by itself, but it does mean the bull case does not require paying up for goodwill the market has already written off.

Bear Case

Start with the obligation, because it is the thing that decides how much time the operating story gets. The company carries about 5.0 billion dollars of borrowings against 268 million dollars of liquid assets, at a weighted average stated rate of 7.72% as of December 31, 2025. Borrowings under the January 2031 facility run at a term SOFR-based rate, plus an applicable margin of 4.25 %, which is not investment-grade pricing. Measured on the company's own through-the-cycle operating profit rather than the depressed trailing figure, that debt is about 21.76 times operating profit, and through-cycle operating profit covers only about half of the interest bill. Trailing free cash flow rounds to nothing.

The covenant is the mechanism that turns a slow year into a fast problem. Under the June 2025 credit facility amendment, when revolving borrowings exceed a threshold share of commitments, the company must maintain a maximum first lien net leverage ratio. Leverage covenants measured against a normalized earnings figure work fine until the earnings stop being normal. With a trailing operating margin of 0.7% against a through-cycle 4.4%, this company has already spent a stretch below its own normal, and the segment recovery in the March quarter is one quarter old.

Then there is who owns it. Bausch Health held 310,449,643 Bausch + Lomb common shares, which represents approximately 88% of the issued and outstanding common shares of Bausch + Lomb, as of February 11, 2026. The 10-K lists among its own risks our status as a controlled company, and the possibility that BHC's interest may conflict with our interests and the interests of our other securityholders. The float is small, the votes are not in public hands, and the direction of the company is set by a parent with its own creditors to satisfy.

Those creditors have noticed. The filing discloses litigation alleging that the potential future separation of Bausch + Lomb from BHC by distribution of Bausch + Lomb stock to BHC's shareholders would harm them. A separation is the single event most likely to reprice these shares, and it is being contested before it happens. Restructuring, integration and separation costs already ran 58 million dollars in 2025 against 26 million dollars in 2024, so the process keeps consuming cash while the outcome stays open.

Underneath all of it sits the assumption the price is making. At roughly 49 times through-the-cycle operating profit, the arithmetic can only be satisfied by holding growth at the ceiling a self-funding business can manage, for about 5.5 years. Of comparable fast growers, only about 28% held that kind of pace over a stretch that long, and none of those were doing it while paying 7.72% on five billion dollars of borrowings. The bull case and the bear case agree on the segment numbers. They disagree on whether one good quarter buys enough time.

Valuation

Most valuation approaches need an earnings figure to work from, and this company's trailing bottom line is negative. Trailing operating margin ran 0.7%, against a through-the-cycle figure of 4.4% on the same revenue base, so the sensible read uses the normalized number rather than the trough. On that basis the enterprise costs roughly 49 times operating profit, which the arithmetic can only satisfy by holding growth at the ceiling a self-funding business can reach, for about 5.5 years. The cost of capital used is 7.3%, and each additional percentage point of it moves the required horizon by about 2.3 years.

Two things survive when the earnings-based approaches cannot run. One is book value, at 17.96 dollars a share against a price of $16.19, so the equity changes hands below what the balance sheet carries. The other is revenue: about $5.21 billion of it, growing in the high single digits. The two point in different directions, which is the honest state of this valuation. The asset frame says the market has already written the business down. The multiple frames, working off a company that converts very little of that revenue into profit today, say the enterprise value is generous.

The reconciliation between them is entirely about leverage. The market capitalization is 5.8 billion dollars, and the enterprise carries roughly 10.7 billion dollars of value once the borrowings are added. So the equity looks cheap against book while the whole business looks expensive against its earnings, and both statements are true at once because the creditors own most of the enterprise. That is not a paradox. It is what a levered recovery looks like from two seats.

The filed inputs that carry the recovery case are the segment results. Vision Care profit of 202 million dollars against 176 million dollars, Pharmaceuticals of 66 million dollars against 11 million dollars, and Surgical at 9 million dollars against a 7 million dollar loss, all for the March 2026 quarter, add to roughly 277 million dollars against roughly 180 million dollars a year earlier. Against that, the mandatory amortization on the September 2028 facility is $ 13 million through June 2028, so the near-term calendar is manageable even if the refinancing at the end of it is not.

Cohort position is where the gap gets sized. COO earns an 11.8% operating margin on $4.23 billion of revenue, ALGN 13.6% on $4.10 billion, and NVST 8.5% on $2.81 billion. This company's through-the-cycle margin of 4.4% sits below all of them on a larger revenue base. Whether the price is reasonable comes down to how much of that distance is closable and how quickly, because at about 21.76 times through-cycle operating profit in borrowings, the interest bill does not wait for the answer.

Catalysts

The March 2026 quarter, filed on April 29, 2026, is the first in a while where all three segments moved the same way. Vision Care profit reached $202 million against $176 million a year earlier, Pharmaceuticals $66 million against $11 million, and Surgical $9 million against a $7 million loss, with the filing attributing the surgical swing to higher revenue and to a shift toward premium product. That is roughly 277 million dollars of combined segment profit against roughly 180 million dollars, and it is the single most important development in the story.

The separation from Bausch Health is the event with the largest potential effect on the shares and the least certain timing. As of February 11, 2026 the parent still held about 88% of the outstanding common shares, and the 10-K describes the plan as proposed, listing among its uncertainties whether financing is obtained on the terms or timelines anticipated or at all and how the transaction is structured, as a distribution or a sale. Litigation is already pending over whether a distribution to the parent's shareholders would harm the parent's creditors, which means the timing is not purely a management decision.

The cost of that process is visible and continuing. Restructuring, integration and separation costs ran $58 million in 2025 against $26 million in 2024 and $44 million in 2023. Against a company that produced almost no free cash flow over the trailing year, those are not rounding items, and they will keep appearing until the structure is settled one way or the other.

Peer Cohorts (Per Segment, With Filing Citations)

Vision Care (reported)

• MDT (Medtronic plc)
• FY2025 10-K: …stapling and energy platform. • Our ability to execute ongoing strategies addressing the pressures to bariatric surgery procedure volumes in the U.S. from pharmaceuticals, and growth of surgical soft tissue robotics procedures in the U.S. • Our ability to create markets and drive products and procedures into emerging…
• FY2025 10-K: …a comprehensive line of medical devices and implants used in the treatment of the spine and musculoskeletal system. The division also provides biologic solutions for the orthopedic markets and offers unique and highly differentiated imaging, navigation, power instruments, and robotic guidance systems used in spine…
• SYK (STRYKER CORP)
• FY2025 10-K: …technologies and, together with our customers, we are driven to make healthcare better. We offer innovative products and services in MedSurg, Neurotechnology and Orthopaedics that help improve patient and healthcare outcomes. Our products include surgical equipment and surgical navigation systems; endoscopic and…
• FY2025 10-K: …better. We offer innovative products and services in MedSurg, Neurotechnology, and Orthopaedics that help improve patient and healthcare outcomes. Alongside our customers around the world, we impact more than 150 million patients annually. Our goal is to achieve sales growth at the high-end of the medical technology…
• BSX (BOSTON SCIENTIFIC CORP)
• FY2025 10-K: …technological changes in the medical devices industry or low-cost competitive offerings, which could have an adverse effect on our business, financial condition or results of operations. The medical device markets in which we participate are highly competitive. We encounter significant competition across our product…
• FY2025 10-K: …seasonality, customer purchases of our medical devices have historically been lower in the first and third quarters of the year. Resources Manufacturing and Raw Materials We are focused on continuously improving our supply chain effectiveness, strengthening our manufacturing processes and increasing operational…
• ABT (ABBOTT LABORATORIES)
• FY2025 10-K: …across all businesses, with double-digit growth in Diabetes Care, Heart Failure, Electrophysiology, and Structural Heart, and in 2025, Rhythm Management. Growth was led by Diabetes Care where sales of Abbott's continuous glucose monitoring (CGM) systems continued to increase and totaled $7.6 billion in 2025 and $6.4…
• FY2025 10-K: …including consumers, pharmacists, physicians, and other healthcare providers. Government agencies are also important customers. ________________________________________________________ * As used throughout the text of this report on Form 10-K, the term "Abbott" refers to Abbott Laboratories, an Illinois corporation,…

Pharmaceuticals (reported)

• JNJ (Johnson & Johnson)
• FY2025 10-K: 2025, representing an increase of 10.1% as compared to the prior year. Growth of SPRAVATO (esketamine) was driven by continued increased physician and patient demand. Growth was partially offset by the sales decline of INVEGA SUSTENNA / XEPLION / INVEGA TRINZA / TREVICTA primarily due to the impact of Medicare Part D…
• FY2025 10-K: …market, resulting in the potential for substantial market share and revenue losses for the applicable products, and which may result in a non-cash impairment charge in any associated intangible asset. In addition, from time to time, the Company's subsidiaries may settle these types of actions and such settlements can…
• ABBV (AbbVie Inc.)
• FY2025 10-K: …directly or indirectly, through reimbursement, payment, pricing, coverage limitations, or compulsory licensing. Political and budgetary pressures in the United States and in other countries may also heighten the scope and severity of pricing pressures on AbbVie's products for the foreseeable future. United States.…
• FY2025 10-K: …2026 to the mid 2040s, in aggregate are believed to be of material importance in the operation of AbbVie's business. The following patents, licenses and trademarks are significant: those related to risankizumab (which is sold under the trademark Skyrizi) and those related to upadacitinib (which is sold under the…
• LLY (ELI LILLY & Co)
• FY2025 10-K: …and vendors. These agreements may be breached, and we cannot be certain that we have adequate remedies. If our trade secrets or confidential information become known or are independently discovered by competitors, or if we enter into disputes over ownership of inventions, our business and results of operations could…
• FY2025 10-K: …U.S. Private Sector Dynamics In the U.S. private sector, consolidated and integrated healthcare organizations significantly affect the competitive marketplace for pharmaceuticals. Health plans, managed care organizations, pharmacy benefit managers, wholesalers, pharmacies, and other supply chain entities have…
• BMY (Bristol-Myers Squibb Company)
• FY2025 10-K: …consolidation and integration of pharmacy chains, wholesalers and pharmacy benefit managers will increase competitive and pricing pressures on pharmaceutical manufacturers, including us. Third-party royalties represent a significant percentage of our pretax income and operating cash flow. We have entered into several…
• FY2025 10-K: …end of regulatory exclusivity or the COM patent expiration for the respective products and PTR if granted. In situations where there is only regulatory exclusivity without patent protection, a competitor could seek regulatory approval by submitting its own clinical study data to obtain marketing approval prior to the…
• PFE (Pfizer Inc.)
• FY2025 10-K: …us for the development of technologies and processes or greater experience in particular therapeutic areas, and technological innovation and/or consolidation among certain pharmaceutical and biotechnology companies can enhance such advantages. These advantages may make it difficult for us to compete with them…
• FY2025 10-K: …Payors may give preference to generic drugs and biosimilars more aggressively to generate savings and attempt to stimulate additional price competition. In addition, we expect that consolidation and integration among pharmacy chains, wholesalers and PBMs will increase pricing pressures in the industry. Some states…

Surgical (reported)

• COO (The Cooper Companies, Inc.)
• FY2025 10-K: …pricing pressure. As a result of these competitive forces, we believe there will continue to be pricing pressure in the future. Because our CooperSurgical products are generally purchased by hospitals and surgery centers, OB/GYN medical offices and fertility clinics, and billed to various third-party payors, changes…
• FY2025 10-K: …$ 278.3 Excluded from the above table are additional leases to expand manufacturing as well as research and development capacity that have not yet commenced. The undiscounted lease payments are estimated at $ 140.2 million for leases that will commence starting in fiscal 2026 with initial terms ranging from 20 to 24…
• ALGN (ALIGN TECHNOLOGY, INC.)
• FY2025 10-K: …or 7.8% year-over-year; ◦ Imaging Systems and computer-aided design and computer-aided manufacturing ("CAD/CAM") services revenues of $789.6 million, an increase of 2.7% year-over-year; ◦ Income from operations of $545.8 million and operating margin of 13.5%; ◦ Effective tax rate of 29.9%; ◦ Net income of $410.4…
• FY2025 10-K: …train, motivate, manage and retain employees, and ensure our suppliers remain diverse and capable of meeting demand for the systems, raw materials, parts and components essential to product manufacturing and delivery. We may fail to balance near-term efforts to meet existing demand with future demand, including…
• NVST (ENVISTA HOLDINGS CORPORATION)
• FY2025 10-K: …markets, critical to our growth strategy. The cost reduction initiatives we have taken and will continue to undertake in the future allow us to further invest in this growth strategy, which in turn we believe should improve our margins. 50 Our continued investment in Spark, our clear aligner system, has led to…
• FY2025 10-K: …primarily develops, manufactures and markets dental implant systems, including regenerative products, dental prosthetics and associated treatment software and technologies, as well as orthodontic bracket systems, aligners and lab products. Specialty Products & Technologies Selected Financial Data For the Years Ended…
• XRAY (DENTSPLY SIRONA Inc.)
• FY2025 10-K: …dated September 14, 2022, by and among DENTSPLY SIRONA Inc., the Subsidiary Borrowers from time to time party thereto, the lender parties thereto and JPMorgan Chase Bank, N.A., as administrative agent (21) 4.17 Consent Memorandum, dated November 4, 2022, by and among DENTSPLY SIRONA Inc., the Subsidiary Borrowers…
• FY2025 10-K: …of Amended and Restated DENTSPLY SIRONA Inc. Indemnification Agreement dated as of February 27, 2024* (25) ( e) Form of Amended and Restated DENTSPLY SIRONA Inc. Indemnification Agreement dated as of December 10, 2025* (Filed herewith) 10.8 Form of Option Grant Notice Under the DENTSPLY SIRONA Inc. 2016 Omnibus…
• MMSI (MERIT MEDICAL SYSTEMS INC)
• FY2025 10-K: …compared to cardiovascular operating income of $150.2 million for the year ended December 31, 2024. This increase in cardiovascular operating income was primarily related to increased sales and gross profit, partially offset by increased SG&A and R&D expenses. Endoscopy Operating Income. Our endoscopy operating…
• FY2025 10-K: …purchase agreements with Cook Medical Holdings LLC ($210.0 million), Endogastric Solutions, Inc. ($105.0 million) and Scholten Surgical Instruments, Inc. ($3.0 million). Cash outflows invested in acquisitions for the year ended December 31, 2023 were $134.5 million and were primarily related to payments required by…
• ICUI (ICU MEDICAL INC/DE)
• FY2025 10-K: …operations in Costa Rica, Europe, Mexico and the U.S. to support new and existing products and in infusion pumps that get placed with customers outside the U.S. We expect to use our cash and cash equivalents to fund our capital expenditures. Amounts of spending are estimates and actual spending may substantially…
• FY2025 10-K: …statement filed April 3, 2013 (File No. 001-34634). 10.6^ Amended and Restated ICU Medical, Inc. 2011 Stock Incentive Plan. Filed as an Exhibit to Registrant's Quarterly Report on Form 10-Q for the Quarter ended March 31, 2018 (File No. 001-34634). 10.7^ First Amendment to ICU Medical, Inc. Amended and Restated 2011…
• SOLV (SOLVENTUM CORPORATION)
• FY2025 10-K: Surgical ("Acera"), a privately held bioscience company focused on developing and commercializing fully engineered materials for regenerative wound care that expands the Company's acute care portfolio, pursuant to a merger agreement. For the year ended December 31, 2025, net sales related to Acera were not material to…
• FY2025 10-K: …and manufacturing expertise. We serve a diverse customer base, ranging from multidisciplinary hospitals to local clinics/practices. Our long-tenured and collaborative customer relationships globally give us unique insights into their needs and preferences. These insights inform our innovation processes, drive…
• ITGR (INTEGER HOLDINGS CORPORATION)
• FY2025 10-K: …meshes, guidewires, introducer sheaths, steerable sheaths and delivery catheters, and implants used in transcatheter aortic valve replacement, balloon aortic valvuloplasty, transcatheter mitral valve repair and replacement, tricuspid mitral valve repair and replacement, atrial and defect closure, left ventricular…
• FY2025 10-K: …technology platforms, including UV and thermal cure hydrophilic coatings. On February 28, 2025, we acquired substantially all of the assets and assumed certain liabilities of VSi . Prior to the acquisition, VSi was a privately-held full-service provider of parylene coating solutions, primarily focused on complex…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.