UPDATE: J.P. Morgan Raises PT on Valeant Pharmaceuticals to $53 (VRX)

J.P. Morgan is out with its report today on Valeant Pharmaceuticals VRX, raising its PT from $46 to $53. In a note to clients, J.P. Morgan writes, "Valeant reported solid 1Q/11 results driven by upside from the US dermatology franchise as well as better-than-expected gross margins and again increased its 2011 guidance. Following today's results, we are increasing our 2011 estimates (due in part to 1x benefits such as the upcoming GSK retigabine milestone payment) as well as our out-year forecasts (modestly higher sales and gross margins). In addition, we continue to see business development as an ongoing catalyst for VRX shares. We are maintaining our Overweight rating. We arrive at our December 2011 price target of $53 (up from $46) through a DCF analysis of our current modeled estimates along with an assumption of continued business development of 50% of free cash flow invested in targets at 2.5x sales (Valeant's average P/S multiple for recent deals)." Shares of VRX closed Monday at $51.88.